Palo Alto City Council
October 2, 2023

AMENDMENT NO. 2 TO CONTRACT NO. C18170810A

BETWEEN THE CITY OF PALO ALTO AND
BRIGHTVIEW LANDSCAPE SERVICES, INC.

This Amendment No. 2 (this “Amendment”) to Contract No. C18170810A (the “Contract” as defined below) is entered into as of September 18, 2023, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and BRIGHTVIEW LANDSCAPE SERVICES, INC., a California corporation, located at 4055 Bohannon Drive, Menlo Park, CA 94025 (“CONTRACTOR”).

CITY and [CONSULTANT or CONTRACTOR] are referred to collectively as the “Part ies” in this Amendment.

R E C I T A L S

A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of providing Landscape Maintenance Services, as detailed therein.

B. The Parties entered into Amendment No. 1 to amend the Contract in order to extend the Contract term by three (3) months through September 30, 2023 and increase compensation accordingly by Three Hundred Five Thousand Six Hundred Six Dollars ( $305,606) from Five Million Eight Hundred Twenty-One Thousand One Hundred Six Dollars ($5,821,106) to Six Million One Hundred Twenty-Six Thousand Seven Hundred Twelve Dollars ($6,126,712) as detailed therein.

C. The Parties now wish to amend the Contract in order to add weekend services effective July 1, 2023 to the Scope of Services and increase compensation accordingly by Seventy Five Thousand One Hundred Fifty-Two Dollars ($75,152) from Six Million One Hundred Twenty-Six Thousand Seven Hundred Twelve Dollars ($6,126,712) to Six Million Two Hundred One Thousand Eight Hundred Sixty-Four Dollars ($6,201,864), as detailed herein.

NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:

SECTION 1. Definitions. The following definitions shall apply to this Amendment:

Contract. The term “Contract” shall mean Contract No.

C18170810A between CONSULTANT and C ITY, dated May 29,
2018, as amended by:

Amendment No. 1, dated June 12, 2023

DocuSign Envelope ID: 1A814FB9-8A1B-45C8-B9B7-4C3CF10597FC Item 6
Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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a. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract.

SECTION 2. Section 5 “COMPENSATION FOR ORIGINAL TERM” of the Contract is hereby amended to read as follows:

“COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not -to-exceed compensation for t he full per formance of the Services and reimbursab le expenses, if any:

The total maximum lump sum compensation of dollars ($ ); OR

The sum of dollars ($ ) per hour, not to exceed a total maximum compensation amount of dollars ($ ); OR

A sum calculated in accordance with the fee schedule set forth at Exhibit C, not to exceed a total maximum compensation amount of Six Million Two Hundred One Thousand Eight Hundred Sixty-Four Dollars ($6,201,864).

CONTRACTOR agrees that it can perfo rm the Services for an am ount not to exceed th e total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR fo r w hich payment wo uld result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY.

CITY has set aside the sum of Two Hundred Nine ty-One Thousand Seven Hundred Forty- Nine Dollars ($291,749) for Additional Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRACTOR’s proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a negotiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set for th above for Additional Services. Payment for Additional Services is subject to all require ments and restrictions in this Agreement.”

SECTION 3. The following exhibit(s) to the Contract i s/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference:

DocuSign Envelope ID: 1A814FB9-8A1B-45C8-B9B7-4C3CF10597FC Item 6
Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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a. Exhibit “B” entitled “SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2”, AMENDED, REPLACES PREVIOUS.

b. Exhibit “C” entitled “SCHEDULE OF FEES, AMENDMENT NO. 2”,AMENDED, REPLACES PREVIOUS.

SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.

SECTION 5. Incorporation of Recitals . The r ecitals set forth above are terms of this Amendment and are fully incorporated herein by this reference.

(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)

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Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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SIGNATURES OF THE PARTIES

IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.

CITY OF PALO ALTO

_______________________________
City Manager

APPROVED AS TO FORM:

_______________________________
City Attorney or Designee

BRIGHTVIEW LANDSCAPE SERVICES,
INC.

Officer 1

By:___________________________

Name:________________________

Title:__________________________

Officer 2

By:___________________________

Name:_________________________

Title:__________________________

Attachments:

EXHIBIT “B” entitled “SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2” (AMENDED,

REPLACES PREVIOUS)
EXHIBIT “C” entitled “SCHEDULE OF FEES, AMENDMENT NO. 2” (AMENDED, REPLACES

PREVIOUS)

DocuSign Envelope ID: 1A814FB9-8A1B-45C8-B9B7-4C3CF10597FC CFO
Brett Urban, Chief Financial Officer
Assistant Secretary
Susan DeSantis
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C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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EXHIBIT B
SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2
(AMENDED, REPLACES PREVIOUS)

CONTRACTOR shall perform the Services according to the following schedule:

The Contractor’s hours of operation shall conform to the hours of 6:00 a.m. and 5:00 p.m. during the life of the Agreement unless specified otherwise in this Agreement. The Contractor’s hours of operation shall conform to the hours of 9:00 a.m. and 3:00 p.m. for medians and roadside strips.

Hours of operation in the University and California Avenue Business District are an exception.

Cleaning equipment, when used in public streets in business districts shall be allowed during the hours of 10:00 pm and 7: 00 am, Monday through Friday, providing no such piece of equipment shall produce a noise level that exceeds 70 dBA measured at a distance of 25 feet.

SERVICE LEVELS-Service frequencies are listed below unless delineated otherwise in Section A, B, C, D, E, F, and H.

I. DAILY SERVICE- (Monday through Friday)

The following sites require daily service.

City Facilities

Mitchell Community Center Mitchell Library
City Hall

Parks

Bol Park
Boulware Park
Bowden Park
Briones Park
Cameron Park
Cogswell Park
Eleanor Pardee Park
Heritage Park
Hoover Park
Johnson Park
Lytton Plaza
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Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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Mitchell Park
Monroe Park
Peers Park
Ramos Park
Rinconada Park
Robles Park
Scott Park
Seale Park
Terman Park
Ventura School grounds
Werry Park

Median, Roadside Strips, & Bioretention Basins
University Ave.

California Ave.

II. MONDAY, WEDNESDAY, FRIDAY SERVICE

The following sites require service on every Monday, Wednesday, and Friday:

Parks
Bowling Green
El Palo Alto Park
Mayfield Park
Sarah Wallis Park
Weisshaar Park

City Facilities
Art Center
Children’s Theatre
Children’s Library
Cubberley Community Center
Downtown Library
Lucie Stern Community Center
Rinconada Library
Roth Building

III. SEMI-WEEKLY SERVICE

The following sites require service twice per week. Actual days to be determined by Field Service Inspectors and/or Project Manager.

City Facilities
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Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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Sterling Canal

Parking Lots
University Ave Business District
California Ave Business District
Cowper/Webster
Ted Thompson Garage

Median, Roadside Strips, & Bioretention Basins
San Antonio Rd.

Embarcadero Islands/Underpass
(Maintenance shall commence on January 1, 2019, for new landscaping)

IV. WEEKLY SERVICE

The following sites require service once per week. Actual day to be determined by the Field Service Inspectors and/or Project Manager.

Parks
Hale Well Park
Timothy Hopkins Creekside Parks
Terman Park

City Facilities
Arastradero Fire Station
Alma Fire Station
Alma Tower
Animal Shelter
Embarcadero Fire Station (commence July 1, 2019)
Flood Basin
Hanover Fire Station
Mitchell Fire Station
Municipal Service Center
Junior Museum

Median, Roadside Strips, & Bioretention Basins
Alma St
Arastradero Islands
Arcadia Pl.

California Ave/Birch Medians
California Avenue Business District Tree Wells
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Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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Charleston Rd.

Downtown Tree Wells
El Camino Real Islands
Forest Lawn Parkway
Oregon Expressway
Page Mill Islands
Southgate Bioretention Basins
E. & W. Greenwich Cul de Sacs
University Islands/Underpass

Utility Sub-Stations & Well-Sites
Colorado Substation

V. MONTHLY

City Facilities
Bike Paths

Parking Lots
Midtown Parking Lots

Median, Roadside Strips, & Bioretention Basins
Alma St. West @ El Carmelo
AMBLUR (Maintenance shall commence on October 1, 2018)
Caltrans Underpass
N. California Ave (across from Jordan Middle School)
Arastradero Rd
Charleston-Arastradero Corridor Medians, Roadside Strips, and Bioretention Basins (Maintenance shall commence on the following dates: Phase 1 and phase 2- June 1, 2019 and phase 3 June 1, 2021)
Evergreen Park Closures/Park Blvd. Medians
Quarry Islands
Roundabouts
Miranda Islands
101 Sound walls (north and south)
Bryant/Addison Circle
Lytton/Guinda Circle
Eleanor Park Area Cul de Sacs
Island Drive
Melville Island
Welch Rd Center Medians
DocuSign Envelope ID: 1A814FB9-8A1B-45C8-B9B7-4C3CF10597FC Item 6
Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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Utility Sub-Stations & Well-Sites
Adobe Creek Substation and Pump Station
Alma Electric Substation
Arastradero Rd. Fluoride Station
Gas Recovery Station 4
Geng Rd. Substation
Hale Well Site
Hanover Substation
Hansen Substation
Matadero Substation
Middlefield Substation
Maybell Substation
Mitchell Substation
Page Mill Substation
PG&E Substation
Quarry Substation
SCAADA Substation
San Francisquito (SF) Creek and Substation

VI. WEEKEND SERVICE (SATURDAYS AND SUNDAYS) – EFFECTIVE JULY 1, 2023

Note: Exhibit A Scope of Services, Section IX, General Maintenance and Cleanup and Section X, Playground and Playground Equipment Maintenance shall be completed at the following sites during weekend service:

Bol Park
Eleanor Park
Greer Park
Hoover Park
Johnson Park
Mitchell Park
Peers Park
Rinconada Park
Robles Park
Seale Park

VII. SITES THAT REQUIRE HOLIDAY SERVICE

Bol Park
Boulware Park
Briones Park
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Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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Cameron Park
Cogswell Park
Eleanor Pardee Park
Hoover Park
Johnson Park
Lytton Plaza
Mitchell Park (includes Magical Bridge Playground) Monroe Park Peers Park
Ramos Park
Rinconada Park
Robles Park
Scott Park
Seale Park
Ventura School grounds
Werry Park

Note: The contractor must provide all General Maintenance Clean-up and Playground Equipment Maintenance at the above sites on these following holidays and specific holiday weekend days:

Memorial Day Weekend (Sunday and Monday) Fourth of July Weekend as follows:

Wednesday July 4, 2018
Thursday July 4, 2019
Saturday July 4, 2020 and Sunday July 5, 2020)
Sunday July 4, 2021 and Monday, July 5, 2021 Monday, July 4th, 2022 and Tuesday, July 4, 2023 Labor Day Weekend (Sunday and Monday)

Section H, Byxbee Park Vegetation Management Project
Byxbee Park, for purposes of this contract, is defined as having two areas: the slope that goes around the entirety of the old landfill that creates Byxbee Park, and the "top". The top area is shown on Byxbee Map 2 in final scope of work/services.

Mowing of the top shall begin during the month of May or June to reduce annual weedy bio- mass, remove plants with root systems greater than a foot in depth (i.e., coyote brush, mustard, Russian thistle) and provide sunlight to emerging perennial natives.

The slopes will be mowed from the levee road to the midpoint of the slope, according to this schedule. Please refer to the color-coded areas of Byxbee Map 3 in final scope of work/services.

Orange: Years 1 and 4.

Green: Years 2 and 5.

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Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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Blue: Year 3.

The mowing shall be repeated as needed during the year to meet the height specifications.

DocuSign Envelope ID: 1A814FB9-8A1B-45C8-B9B7-4C3CF10597FC Item 6
Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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EXHIBIT C
SCHEDULE OF FEES, AMENDMENT NO. 2
(AMENDED, REPLACES PREVIOUS)

CITY shall pay CONTRACTOR according to the following rate schedule. The maximum amount of compensation to be paid to CONTRACTOR, including both payment for services and reimbursable expenses, shall not exceed the amounts s et forth in Sections 5 and 6 of the Agreement. Any services pr ovided or hours worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY.

The contracts yearly total for each section A, B, C, D, E, F, and H shall be divided by 12 months for a monthly billing cycle. Please see chart below for monthly totals.

DocuSign Envelope ID: 1A814FB9-8A1B-45C8-B9B7-4C3CF10597FC Item 6
Attachment D - Contract
C18170810A Amendment
No. 2 with Brightview
Landscape Services, Inc.

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: IT Department
Meeting Date: October 2, 2023
Report #:2307-1759
TITLE
Approval of a SaaS Agreement C23188925 with Accela for an Amount Not-to-Exceed $1,143,563 for Online Planning and Building Permitting and Enhanced Reporting System for a Period of Three-Years and Authorization of a 10% Contract Contingency in an Amount Not-to- Exceed $114,356; CEQA Status - Not a Project

RECOMMENDATION
Staff recommend the Council:
1) Approve and authorize the City Manager or designee to execute the attached SaaS contract with Accela, Contract No. C23188925, in the amount not to exceed $1,143,563 for the Licensing, Maintenance and Support of the City’s Permitting system; and 2) Authorize the City Manager or their designee to approve a contract contingency for unforeseen licensing or additional services that might develop during the contract period, the total value of which shall not exceed $114,356.

BACKGROUND
The City of Palo Alto currently has a contract with Accela, Inc. for an online permitting system which allows the City, contractors, and citizens to apply for and check the status of planning entitlements and permits, including Building, Fire, Public Works, and Utilities. The system also allows field inspection staff to provide results of inspections from the work site, and tracks Code Enforcement cases. The City has been grandfathered into legacy costs for the duration of the current contract that is expiring on September 30, 2023 (Contract No. C19173550), which Council approved an exemption to competitive solicitation through that staff report on 10/17/2019.

Within Accela, there are two portals: Accela Citizen Access and Accela Civic Platform. Accela Citizen Access is the outward-facing portal for citizens and contractors to submit applications, remit payments, and check the status of all permits online at any time regardless of the City’s normal business hours. Accela Civic Platform is a staff-facing portal programmed with custom Item 7
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workflows to process various permit types. Accela is also the data source for the BuildingEye, allowing the public to easily view online permit applications through an interactive mapping interface. In addition to the permit process service, staff rely on Accela’s database for record management and reporting functionalities to optimize internal operations and for data reporting.

Accela has been the main technology utilized for the City’s permitting process for more than a decade. Over the years, significant time and City resources have been invested in Accela software enhancements and training in order to fully utilize the system in the areas of Building, Code Enforcement, Fire, Planning, Public Works, and Utilities. Additionally, data capturing and reporting capabilities have also expanded over the years, making historic and information available to City staff, decision makers, and the community.

The existing Accela, Inc. contract was extended for the five-year period of October 1, 2018 to September 30, 2023.1 An amendment to the contract was approved on March 21, 2022 to add Accela Mobile Office and Accela Electronic Reporting Database modules. For the contract extension, an exemption from competitive solicitation was granted due to staff’s significant investment in the system; transitioning to a new system at the time was impractical and disadvantageous.

With the COVID-19 pandemic beginning in 2020, staff quickly directed their attention toward improvements to provide online permitting services through Accela while City offices were closed to the public. Staff continued to focus on enhancing the online permitting functionalities during the years of the pandemic, leaving insufficient resources to address competitive solicitation. Additionally, the Data and Technology Applications (DATA) team which manages Accela, encountered impactful staffing changes, resulting in an impractical timeline for competitive solicitation and a proper transition to new permitting software.

The proposed SaaS contract groups standard functionalities of Accela under one fee whereas the legacy contract piecemealed the basic functionalities of the software. This new contract allows more functionalities to be accessible to more users since they will now come as standard capabilities. It also includes new features such as an Accela and Granicus/Open Cities integration which could allow a more user-friendly permit application process, offering easy-to- use web portals and online forms, and an Accela assessment of our existing system to identify areas for efficiencies.

ANALYSIS
Staff began negotiation of fair rates for the level of services provided on the new SaaS contract in February 2023 and reached an agreed-upon rate in July 2023. The average per user cost during the three-year contract is $1,807.43 for 185 users which is approximately 22 percent less 1 Contract C19173550: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city- manager-reports-cmrs/year-archive/2019/id-9489.pdf
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than the original quote. Comparatively, based on 2022 figures, neighboring jurisdictions pay slightly more on a per user basis:
•City of Santa Clara: $2,012.40
•Menlo Park: $2,365.20
•Cupertino: $2,777.00
•County of Santa Clara: $2,883.23
The following services will be provided, and modules supported through this contract:
•Modules
oBuilding Inspection
oPlanning Entitlements
oCode Enforcement
oFire
oPublic Works
oUtilities
•Features
oAccela Citizen Access (Public-Facing)
oGovXML
oHosting
oAccela Mobile
oAccela GIS
oFree Open Cities and Accela Integration
oElectronic Replicated Database
•Services
oSupport and maintenance
oUpgrades
oFree assessment of Accela configurations

Without this contract, crucial functions serving the public from the Planning & Development Services Department will cease. During the three-year term of this contract, a new competitive solicitation for permitting software will begin in 2024 to assess options, prepare for data transfer, and implement a transition plan to ensure there are no disruptions to services. With the City’s long-term and extensive software development with Accela, transitioning to a new permitting system will be a monumental effort requiring careful and thorough planning. A rushed competitive solicitation and transition would cause detrimental interruptions to the public‘s access to Planning and Building permit processing and approvals. If a new system is chosen, staff will need sufficient time for execution of a contract, implementation and then testing and validation.

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FISCAL/RESOURCE IMPACT
The FY 2024 Adopted Operating Budget for the Information Technology Department has almost $0.2 million budgeted for Accela licensing, maintenance, and support. The remaining funding necessary for the first year will be coming from fees collected from the Development Center.

The funds collected from these fees are placed in IT’s operating budget annually and used by the Planning and Development Center for technology related projects.

Funding for subsequent years of the contract will be noted as a base change and will be subject to approval through the annual budget process. The Information Technology Department is funded by an internal service fund. Approximately 40% of the department is General Fund funded with the remaining 60% funded by enterprise and special revenue funds.

Year 1: October 1, 2023 – September 30, 2024, $362,748
Year 2: October 1, 2024 – September 30, 2025, $380,885
Year 3: October 1, 2025 – September 30, 2026, $399,930

STAKEHOLDER ENGAGEMENT
The services were coordinated with internal stakeholders and the service provider.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the purchase of software licenses are a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2).

ATTACHMENTS
Attachment A: Accela-Palo Alto Agreement with Exhibits
APPROVED BY:

Darren Numoto, Chief Information Officer
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2633 Camino Ramon, Suite 500
San Ramon, CA, 94583
Proposed by: Brad Jacobs
Contact Phone:

Contact Email: [email protected]
Quote ID: Q-30100
Valid Through: 10/1/2023
Currency: USD
__________________________________________________________________________________________________________________________________________ Order Form
Address Information
Bill To: Ship To:

City of Palo Alto City of Palo Alto
250 Hamilton Avenue
Palo Alto, California 94301
United States
250 Hamilton Avenue
Palo Alto, California 94301
United States
Billing Name: Sarah McRee
Billing Phone: (650) 329-2276
Billing Email: [email protected]
____________________________________________________________________________________________________________________________________________________________ Services Year Start Date End Date Term
(Months)
Price Qty Net Total
Multi Solution User Year 1 10/1/2023 9/30/2024 12 $1,782.50 185 $329,762.50 > Accela Building - SaaS Year 1 10/1/2023 9/30/2024 12 $0.00 185 $0.00 > Accela Planning - SaaS Year 1 10/1/2023 9/30/2024 12 $0.00 185 $0.00 Enhanced Reporting Database
(ERD)
Year 1 10/1/2023 9/30/2024 12 $32,976.25 1 $32,976.25
TOTAL: $362,738.75
Services Year Start Date End Date Term
(Months)
Price Qty Net Total
Multi Solution User Year 2 10/1/2024 9/30/2025 12 $1,871.62 185 $346,250.62 > Accela Building - SaaS Year 2 10/1/2024 9/30/2025 12 $0.00 185 $0.00 > Accela Planning - SaaS Year 2 10/1/2024 9/30/2025 12 $0.00 185 $0.00 Enhanced Reporting Database
(ERD)
Year 2 10/1/2024 9/30/2025 12 $34,625.06 1 $34,625.06
TOTAL: $380,875.68
Services Year Start Date End Date Term
(Months)
Price Qty Net Total
Multi Solution User Year 3 10/1/2025 9/30/2026 12 $1,965.21 185 $363,563.16 > Accela Building - SaaS Year 3 10/1/2025 9/30/2026 12 $0.00 185 $0.00 > Accela Planning - SaaS Year 3 10/1/2025 9/30/2026 12 $0.00 185 $0.00 Quote Number:Q-30100-1 Print Date:7/19/2023

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Attachment A - Accela-
Palo Alto Agreement Final

8.31.23 w exhibits

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Services Year Start Date End Date Term
(Months)
Price Qty Net Total
Enhanced Reporting Database
(ERD)
Year 3 10/1/2025 9/30/2026 12 $36,356.32 1 $36,356.32
TOTAL: $399,919.48
Pricing Summary
Period Net Total
Year 1 $ 362,738.74
Year 2 $ 380,875.69
Year 3 $ 399,919.48
Total $ 1,143,533.91
Additional Terms:

1. No additional or conflicting terms or conditions stated in Customer’s order documentation, including purchase orders, will be incorporated into or form any part of this Order Form or the governing agreement, and all such terms or conditions will be null.

2. This Order Form, including any OnPrem Licenses, Maintenance and Support, and Subscription Services will be governed by the applicable terms and conditions. If those terms and conditions are non-existent, have expired, do not apply or have otherwise been terminated, the following terms at https://www.accela.com/terms/ will govern as applicable, based on the Customer’s purchase.

3. All Software Licenses, Maintenance, and Subscription purchases are non-cancelable and non-refundable.

4. If Customer has a prior agreement with Accela, and this purchase is co-terming with that prior agreement, if the start date on this Order Form is before the actual delivery date of the purchase, Accela may pro-rate this purchase so that it can co-term with the prior agreement.

5. If this Order Form is executed and/or returned to Accela by Customer after the Order Start Date above, Accela may adjust the Order Start Date and Order End Date without increasing the total price based on the date Accela activates the products and provided that the total term length does not change.

6. Enhanced Reporting Database pricing is based on a percentage of SaaS Annual Contract Value. As SaaS Annual Contract Value increases/decreases based on seat count changes or annual uplift ERD pricing will be adjusted accordingly at contract renewal.

7. Pricing is based upon payment by ACH or check. Payment by credit card (including Purchase Cards) for product and services in this Order Form will be subject to a service charge of 3%. There is no service charge for ACH or check payment.

Quote Number:Q-30100-1 Print Date:7/19/2023

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Enhanced Reporting Database Policy
This Accela Enhanced Reporting Database policy is an agreement between you (“You” or “Your”) and Accela,Inc. (“Accela”). The Accela Enhanced Reporting Database (“Reporting Database”) license subscription gives You direct access to a database that is a replicated copy of the Accela Automation Tenant Transaction Database (“Transaction Database”). In addition to the terms and conditions of the applicable Master Agreement, Your use of the Reporting Database is governed by the terms and conditions as set forth below. Accela reserves the right to revoke Your license should You fail to comply with these rules.

1. .Reporting Database is SQL Server-based and will contain exact copy of data from the Transaction Database.

2. Accela will use commercially reasonable efforts to provide a near real-time sync between the Reporting Database and the Transaction database instances. Accela estimates the databases will be synced within seconds, however, in some circumstances this may take several minutes.

3. The Reporting database may only be accessed by authentication credentials provided to You by Accela from an IP address that is on your allow list. If You attempt to Access the Reporting Database from an IP addresses not on your allow list, your access will be denied. IP addresses can be added to or removed from your allow list by contacting Accela support.

4. The Reporting Database is read only and does not support updates, data synchronization or mirroring capabilities.

5. The Reporting Database is only supported in Accela’s SaaS solution hosted in Accela’s Azure environment.

6. Reporting database will be supported per Accela’s standard SaaS Service Level Agreement (“SLA”). Accela is not responsible for maintenance, availability or uptime of any external services or databases that reside outside of Accela’s SaaS environment even if they are interfacing with the Reporting Database.

7. You agree to work in good faith with Accela to mitigate any performance issues that might arise from overuse or abuse of the Reporting Database.

8. Accela reserves the right to interrupt any session that is running against the Reporting Database if, in Accela's sole discretion, the session is deemed to impact the availability or stability of the system as a result of long remote queue length or replication latency to the Reporting Database.

Signatures
Accela, Inc. Customer
Signature: Signature:

Print Name: Print Name:

Title: Title:

Date: Date:

DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Chief Legal Officer
9/5/2023
Aaron Haggarty
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ACCELA SUBSCRIPTION SERVICES AGREEMENT
This Accela Subscription Services Agreement (this “Agreement”) is entered into as of the date of the applicable Order, as defined below, that incorporates these terms (the “Effective Date”) by and between Accela, Inc. and the entity identified in such Order (“Customer”).

1. DEFINITIONS.

1.1 "Accela System" means the information technology infrastructure used by or on behalf of Accela in performing the Subscriptions Services, including all computers, software (including but not limited to Accela Software), hardware, databases, electronic systems (including database management systems), and networks, whether operated directly by Accela or its third party suppliers.

1.2 "Aggregate Data" means data and information related to Customer's use of the Subscription Services, including anonymized analysis of all data processed in the Subscription Services, that is used by Accela in an aggregate and anonymized manner, including compiling statistical and performance information related to the provision and operation of the Services.

1.3 "Authorized User" means one named employee, contractor or agent of Customer (each identified by a unique email address) for whom Customer has purchased a subscription to the Subscription Services and who is authorized by Customer to access and use the Services under the rights granted to Customer pursuant to this Agreement.

1.4 “Consulting Services” means packaged or time and materials consulting, review, training or other services (but excluding Subscription and Support Services) delivered by Accela to Customer pursuant an Order. The Consulting Services Policy is attached as Exhibit A.

1.5 “Customer Data” means the content, materials, and data that Customer, Authorized Users, and External Users enter into the Subscription Services. Customer Data does not include any component of the Subscription Services, material provided by or on behalf of Accela, or Aggregate Data.

1.6 “Documentation” means the then-current technical and functional user documentation in any form made generally available by Accela for the Subscription Services.

1.7 “External Users” means third party users of the Subscription Services that access the public-facing interfaces of the Subscription Services to submit queries and requests to facilitate communications between such third party and Customer.

1.8 “Intellectual Property Rights” means any patent rights (including, without limitation, patent applications and disclosures), copyrights, trade secrets, know-how, and any other intellectual property rights, in all cases whether or not registered or registrable and recognized in any country or jurisdiction in the world.

1.9 “Order” means an Accela order form or other mutually acceptable document fully executed between Customer and Accela that incorporates this Agreement.

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1.10 “Service Availability Policy” means the Service Availability and Security Policy located at Exhibit B of this Agreement.

1.11 “Subscription Services” means the civic administration services, comprised of the Accela System, Software, and Support Services, to which Customer may license access to in accordance with the terms herein.

1.12 “Software” means any licensed software (including client software for Authorized Users’ devices) and Documentation that Accela uses or makes available as part of the Subscription Services.

1.13 “Support Services” means those technical and help services provided by Accela in accordance with the Software Support Services Policies (SaaS) located at Exhibit C of this Agreement.

1.14 “Subscription Period” means the duration of Customer’s authorized use of the Subscription Services as designated in the Order.

2. USAGE AND ACCESS RIGHTS.

2.1 Right to Access. Subject to the terms and conditions of this Agreement, Accela hereby grants to Customer a limited, non-exclusive, non-transferable right and license during the Subscription Period, to permit: (i) Authorized Users to access and use the internal and administrative interfaces of the Subscription Services in accordance with the Documentation to support Customer’s internal business purposes and (ii) its External Users the ability to access and use the publicly available interfaces to submit requests and information to Customer. Each instance of the Subscription Service shall be provisioned with the amount of storage set forth in the Order and additional storage may be purchased at the then-current rates.

2.2 Support Services & Service Availability. During the Subscription Period, Accela shall provide to Customer the Support Services specified in the Order and shall make all commercially reasonable efforts to attain the service levels specified in the applicable policies. The remedies set forth in the Support Services and Service Availability Policy are the sole and exclusive remedies for any breach of the service levels. Customer grants Accela a royalty-free, worldwide, transferable, sub- licensable, irrevocable, perpetual license to use or incorporate into its software or services any suggestions or other feedback provided by Customer or Authorized Users relating to the operation or features of the Subscription Services.

2.3 Purchasing Consulting Services. Customer may purchase Consulting Services from Accela by executing an Order for such services. All prices are exclusive of travel and expenses, which will be invoiced at actual cost, without markup, and will comply with the Consulting Services Policy or as otherwise agreed in the applicable Order. If applicable, one Consulting Services day shall be equal to eight (8) hours.

2.4 Restrictions on Use. Customer shall not, and shall not permit others to: (i) use or access the Subscription Services in any manner except as expressly permitted by the Agreement, including but not limited to, in a manner that circumvents contractual usage restrictions set forth in this Agreement; (ii) license, sub-license, sell, re-sell, rent, lease, transfer, distribute, time share or otherwise make any portion of the Subscription Services available for access by third parties except as otherwise expressly provided herein; (iii) use the Subscription Service in a way that: (a) violates or infringes upon the rights DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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of a third party; or (b) stores or transmits libelous, tortious, or otherwise unlawful material or malicious code or viruses; (iv) create derivative works, reverse engineer, decompile, disassemble, copy, or otherwise attempt to derive source code or other trade secrets from or about any of the Subscription Services (except to and only to the extent such rights are proscribed by law); (v) interfere with or disrupt the security, integrity, operation, or performance of the Subscription Services; (vi) access, use, or provide access or use to the Subscription Services or Documentation for the purposes of competitive analysis or the development, provision, or use of a competing software, SaaS or product or any other purpose that is to Accela’s detriment or commercial disadvantage; (vii) provide access to the Subscription Services to competitors of Accela; (viii) access or use components of the Subscription Service not licensed by Customer; (ix) use or allow the use of the Subscription Services by anyone located in, under the control of, or that is a national or resident of a U.S. embargoed country or territory or by a prohibited end user under Export Control Laws (as defined in Section 12.3, Compliance with Laws); (x) remove, delete, alter or obscure any trademarks, Documentation, warranties, or disclaimers, or any copyright, trademark, patent or other intellectual property or proprietary rights notices from any Subscription Services; or (xi) access or use the Subscription Services in, or in association with, the design, construction, maintenance, or operation of any hazardous environments, systems or applications, any safety response systems or other safety-critical applications, or any other use or application in which the use or failure of the Subscription Services could lead to personal injury or severe physical or property damage.

2.5 Ownership. Accela retains all Intellectual Property Rights, including all rights, title and license to the Subscription Service, Software, Accela System, Support Services, Consulting Services, and Aggregate Data, any related work product of the foregoing and all derivative works thereof by whomever produced; provided however, that to the extent such materials are delivered to Customer as part of the Subscription Services, Consulting Services or Support Services then Customer shall receive a limited license consistent with the terms of Section 2 to use such materials during the Subscription Period.

2.6 Customer’s Responsibilities. Customer will: (i) be responsible for meeting Accela’s applicable minimum system requirements for use of the Subscription Services set forth in the Documentation; (ii) be responsible for Authorized Users’ compliance with this Agreement and for any other activity (whether or not authorized by Customer) occurring under Customer’s account; (iii) be solely responsible for the accuracy, quality, integrity and legality of Customer Data; (iv) use commercially reasonable efforts to prevent unauthorized access to or use of the Subscription Services and Customer Data under its account, and notify Accela promptly of any such unauthorized access or use, and; (v) use the Subscription Services only in accordance with the applicable Documentation, laws and government regulations.

3. PAYMENT TERMS.

3.1 Purchases Directly from Accela. Except as otherwise set forth in an Order, Subscription fees shall be invoiced annually in advance and such fees shall be due and payable on the first day of the Subscription and on each anniversary thereafter for each renewal, if any. All other invoices shall be due and payable net thirty (30) from the date of the applicable invoice. All amounts payable to Accela under this Agreement shall be paid by Customer in full without any setoff, deduction, debit, or withholding for any reason. Any late payments shall be subject to an additional charge of the lesser of 1.5% per month or the maximum permitted by law. All Subscription Services fees are exclusive of any taxes, levies, duties, DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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withholding or similar governmental assessments of any nature (collectively, "Taxes"). If any such Taxes are owed or payable for such transactions, they shall be paid separately by Customer without set-off to the fees due Accela.

3.2 Purchases from Authorized Resellers. In the event that Customer has purchased any products or services through a reseller, subject to these terms, any separate payment arrangements and terms shall be exclusively through such reseller and Accela is not a party to such transactions. Accela’s sole obligations are set forth herein and Customer acknowledges that its rights hereunder may be terminated for non-payment to such third party.

4. CONFIDENTIALITY. As used herein, "Confidential Information" means all confidential information disclosed by a one party to this Agreement to the other party of this Agreement whether orally or in writing, that is designated as confidential by marking it as such; however, emails from a party that only contain a routine confidentiality statement in the signature block or elsewhere are not “Confidential Information”. Further, Confidential Information will not include any information that: (i) is or becomes generally known to the public without breach of any obligation owed to the disclosing party; (ii) was known to the receiving party prior to its disclosure without breach of any obligation owed to the disclosing party; (iii) is received without restriction from a third party without breach of any obligation owed to the disclosing party; or (iv) was independently developed by the receiving party. Each party will use the same degree of care that it uses to protect the confidentiality of its own confidential information of like kind (but in no event less than reasonable care) not to disclose or use any Confidential Information except as permitted herein, and will limit access to Confidential Information to those of its employees, contractors and agents who need such access for purposes consistent with this Agreement and who are bound to protect such Confidential Information consistent with this Agreement. The receiving party may disclose Confidential Information if it is compelled by law to do so, provided the receiving party gives the disclosing party prior notice of such compelled disclosure (to the extent legally permitted).

5. CUSTOMER DATA.

5.1 Ownership. Customer reserves all its rights, title, and interest in and to the Customer Data. No rights are granted to Accela hereunder with respect to the Customer Data, except as otherwise set forth explicitly in Section 5.

5.2 Usage. Customer shall be responsible for Customer Data as entered in to, applied or used in the Subscription Services. Customer acknowledges that Accela generally does not have access to and cannot retrieve lost Customer Data. Customer grants to Accela the non-exclusive right to process Customer Data (including personal data) for the sole purpose of and only to the extent necessary for Accela: (i) to provide the Subscription Services; (ii) to verify Customer’s compliance with the restrictions set forth in Section 2.4 (Restrictions on Use) if Accela has a reasonable belief of Customer’s non-compliance; and (iii) as otherwise set forth in this Agreement. Accela may utilize the information concerning Customer’s use of the Subscription Services (excluding any use of Customer’s Confidential Information) to improve Subscription Services, to provide Customer with reports on its use of the Subscription Services, and to compile aggregate statistics and usage patterns by customers using the Subscription Services.

5.3 Use of Aggregate Data. Customer agrees that Accela may collect, use and disclose Aggregate Data derived from the use of the Subscription Services for industry analysis, benchmarking, analytics, DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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marketing and other business purposes. All Aggregate Data collected, used and disclosed will be in aggregate form only and will not identify Customer, its Authorized Users or any third parties utilizing the Subscription Services.

6. WARRANTIES AND DISCLAIMERS.

6.1 Subscription Services Warranty. During the Subscription Period, Accela warrants that Subscription Services shall perform materially in accordance with the applicable Documentation. As Customer’s sole and exclusive remedy and Accela’s entire liability for any breach of the foregoing warranty, Accela will use commercially reasonable efforts to: (a) repair the Subscription Services in question; (b) replace the Subscription Services in question with those of substantially similar functionality; or (c), after making all commercially reasonable attempts to do the foregoing, terminate the applicable Subscription Services and refund all unused, prepaid fees paid by Customer for such non-compliant Subscription Services.

6.2 Consulting Services Warranty. For ninety (90) days from the applicable delivery, Accela warrants that Consulting Services shall be performed in a professional and workmanlike manner. As Customer’s sole and exclusive remedy and Accela’s entire liability for any breach of the foregoing warranty, Accela will use commercially reasonable efforts to (a) re-perform the Consulting Services in a compliant manner; or, after making all commercially reasonable attempts to do the foregoing, (b) refund the fees paid for the non-compliant Consulting Services.

6.3. Disclaimers. EXCEPT AS EXPRESSLY PROVIDED HEREIN, ACCELA MAKES NO WARRANTY OF ANY

KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND SPECIFICALLY DISCLAIMS ALL

IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, SECURITY, FITNESS

FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW.

6.4. Cannabis-Related Activities. If Customer purchases any Subscription Services for use with any cannabis-related activities, the following additional disclaimers shall apply: Accela is considered a software service provider to its customers and not a cannabis related business or agent thereof. In addition to the foregoing, Accela only retains Subscription Services fees of this Agreement from its Customer for general software services, a state or local government agency, and does not retain these fees from any type of External Users. It is the sole responsibility of the Customer to offer state law compliant services, which may be coordinated and facilitated through the use of the Subscription Services. Accela makes no representations, promises, or warranties with respect to the legality, suitability, or otherwise regarding any third party provider, including partners, and have no responsibility or liability with respect to services provided to Customer by such third parties.

7. INDEMNIFICATION. Accela will defend (or at Accela’s option, settle) any third party claim, suit or action brought against Customer to the extent that it is based upon a claim that the Subscription Services, as furnished by Accela hereunder, infringes or misappropriates the Intellectual Property Rights of any third party, or violation of any data privacy laws, and will pay any costs, fines, penalties, or damages and reasonable attorneys’ fees attributable to such claim that are finally awarded against Customer, provided that Customer provides: (a) Accela notice of such claim as soon practical and in no event later than would reasonably permit Accela to respond to such claim, (b) reasonable cooperation to Accela, at Accela’s expense, in the defense and/or settlement of such claim and (c) Accela the sole and exclusive control of the defense, litigation and settlement of such claim. In the event that Accela reasonably believes, in its sole discretion, that such claim may DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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prevail or that the usage of the Subscription Services may be joined, Accela may seek to: (a) modify the Subscription Services such that it will be non-infringing (provided such modification does not materially reduce the functionality or performance of Customer’s installed instance); (b) replace the Subscription Services with a service that is non-infringing and provides substantially similar functionality and performance; or, if the first two options are not commercially practicable, (c) terminate the remainder of the Subscription Period and refund any, pre-paid, unused fees received by Accela. Accela will have no liability under this Section 7 to the extent any claims arise from (i) any combination of the Subscription Services with products, services, methods of a third party; (ii) a modification of the Subscription Services that were either implemented by anyone other than Accela or implemented by Accela in accordance with Customer specifications; (iii) any use of the Subscription Services in a manner that violates this Agreement or the instructions given to Customer by Accela; (iv) a version of the Subscription Services other than the current, fully patched version, provided such updated version would have avoided the infringement; or (v) Customer’s breach of this Agreement. THIS SECTION 7

STATES THE ENTIRE OBLIGATION OF ACCELA AND ITS LICENSORS WITH RESPECT TO ANY ALLEGED OR

ACTUAL INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS RELATED TO THIS AGREEMENT.

7.5 INDEMNITY
. Unless otherwise covered by Section 7 above, Accela shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all third party demands, claims, or liability of any nature, including death or injury to any person or tangible property damage , including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) to the extent they resulting from, arising out of or in any manner related to the negligent performance or nonperformance by Accela, its officers, employees, agents or contractors under this Agreement. Notwithstanding the previous sentence, nothing in this Section 7.5 shall be construed to require Accela to indemnify an Indemnified Party from a Claim arising from the active negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, or by any omission to perform a duty imposed by law or agreement by, Accela, its officers, employees, agents or contractors under this Agreement.

8. LIMITATION OF LIABILITY. EXCEPT FOR LIABILITY ARISING OUT OF EITHER PARTY’S LIABILITY FOR DEATH OR PERSONAL INJURY OR CUSTOMER’S BREACH OF SECTION 2, NEITHER PARTY’S AGGREGATE

LIABILITY FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR FROM THE

USE OF OR INABILITY TO USE THE SERVICE, WHETHER IN CONTRACT, TORT OR UNDER ANY OTHER THEORY OF LIABILITY, SHALL EXCEED 1.5 X (times)THE TOTAL AMOUNT PAID BY CUSTOMER HEREUNDER IN THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE INCIDENT; EXCEPT FOR LIABILITY ARISING OUT OF CUSTOMER’S BREACH OF SECTION 2 OR EITHER PARTY’S LIABILITY FOR

DEATH OR PERSONAL INJURY, IN NO EVENT SHALL EITHER PARTY OR ANY OTHER PERSON OR ENTITY

INVOLVED IN CREATING, PRODUCING OR DELIVERING THE SERVICE BE LIABLE FOR ANY INCIDENTAL,

SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOSS OF DATA OR

LOSS OF GOODWILL, SERVICE INTERRUPTION, COMPUTER DAMAGE OR SYSTEM FAILURE OR THE COST

OF SUBSTITUTE PRODUCTS OR SERVICES, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT

OR FROM THE USE OF OR INABILITY TO USE THE SUBSCRIPTION SERVICES, WHETHER BASED ON

WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR ANY OTHER LEGAL THEORY. THE FOREGOING EXCLUSIONS APPLY WHETHER OR NOT A PARTY HAS BEEN INFORMED OF THE

POSSIBILITY OF SUCH DAMAGE, AND EVEN IF A LIMITED REMEDY SET FORTH HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.

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9. SECURITY. Accela has implemented commercially viable and reasonable information security processes, policies and technology safeguards to protect the confidentiality and integrity of Customer Data, personal data protect against reasonably anticipated threats. Customer acknowledges that, notwithstanding security features of the Subscription Services, no product, hardware, software or service can provide a completely secure mechanism of electronic transmission or communication and that there are persons and entities, including enterprises, governments and quasi- governmental actors, as well as technologies, that may attempt to breach any electronic security measure. Subject only to its limited warranty obligations set forth in Section 6, Accela will have no liability for any such security breach. Customer further acknowledges that the Subscription Services is not guaranteed to operate without interruptions, failures, or errors. If Customer or Authorized Users use the Subscription Services in any application or environment where failure could cause personal injury, loss of life, or other substantial harm, Customer assumes any associated risks and will indemnify Accela and hold it harmless against those risks.

10. THIRD PARTY SERVICES. Customer may choose to obtain a product or service from a third party that is not directly produced by Accela as a component of the Subscription Services (“Third Party Services”) and this may include third party products resold by Accela. Accela assumes no responsibility for, and specifically disclaims any liability, warranty or obligation with respect to, any Third Party Service or the performance of the Subscription Services (including Accela’s service level commitment) when the Subscription Services are used in combination with or integrated with Third Party Services.

11. TERM AND TERMINATION.

11.1 Agreement Term. This Agreement shall become effective on the Effective Date and shall continue in full force and effect until the expiration of any Subscription Periods set forth in an applicable Order governed by the Agreement.

11.2 Subscription Periods & Renewals. Subscription Periods begin as specified in the applicable Order and, unless terminated earlier in accordance with this Agreement, continue for the term specified therein. Except as otherwise specified in the applicable Order, Orders may only be cancelled or terminated early in accordance with Section 11.3. In the event of any non- renewal or other termination, Customer’s right to use the Subscription Services will terminate at the end of the relevant Subscription Period.

11.3 Termination or Suspension for Cause. A party may terminate this Agreement and Subscription Services license granted hereunder for cause upon thirty (30) days’ written notice to the other party of a material breach if such breach remains uncured at the expiration of such thirty (30) day period. Either party may terminate immediately if the other party files for bankruptcy or becomes insolvent. Accela may, at its sole option, suspend Customer’s or any Authorized User’s access to the Subscription Services, or any portion thereof, immediately if Accela: (i) suspects that any person other than Customer or an Authorized User is using or attempting to use Customer Data; (ii) suspects that Customer or an Authorized User is using the Subscription Services in a way that violates this Agreement and could expose Accela or any other entity to harm or legal liability; (iii) is or reasonably believes it is required to do so by law or court order or; (iv) Customer’s payment obligations are more than ninety (90) days past due, provided that Accela has provided at least thirty (30) days’ notice of such suspension for delinquent payment. Should Customer terminate this Agreement for cause, Accela will refund a pro-rata portion of unused, pre-paid fees.

11.4 Effect of Termination. If this Agreement expires or is terminated for any reason: (i) within thirty DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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(30) calendar days following the end of Customer’s final Subscription Period, upon Customer’s request Accela provided Customer Data and associated documents in a database dump file; provided that Customer pays (a) all costs of and associated with such copying, as calculated at Accela’s then-current time-and-materials rates, and (b) any and all unpaid amounts due to Accela; (ii) licenses and use rights granted to Customer with respect to Subscription Services and intellectual property will immediately terminate; and (iii) Accela’s obligation to provide any further services to Customer under this Agreement will immediately terminate, except as mutually agreed between the parties. If the Subscription Services are nearing expiration date or are otherwise terminated, Accela will initiate its data retention processes, including the deletion of Customer Data from systems directly controlled by Accela. Accela’s Data Storage Policy is attached as Exhibit D to this Agreement.

11.5 Survival. Sections 2.5 (Ownership and Proprietary Rights), 4 (Confidentiality), 6.3 (Disclaimer), 8 (Limitation of Liability), 11.4 (Effect of Termination), 11.5 (Surviving Provisions), and 12 (General Provisions) will survive any termination or expiration of this Agreement.

12. GENERAL.

12.1 Notice. Except as otherwise specified in this Agreement, all notices, permissions and approvals hereunder will be in writing and will be deemed to have been given upon: (i) personal delivery; (ii) three days after sending registered, return receipt requested, post or; (iii) one day after sending by commercial overnight carrier. Notices will be sent to the address specified by the recipient in writing when entering into this Agreement or establishing Customer’s account for the Subscription Services.

12.2 Governing Law and Jurisdiction. This Agreement and any action related thereto will be governed by the laws of the State of California without regard to its conflict of laws provisions. The exclusive jurisdiction and venue of any action related to the subject matter of this Agreement will be the state and federal courts located in the Northern District of California and each of the parties hereto waives any objection to jurisdiction and venue in such courts.

12.3 Compliance with Laws. Each party will comply with all applicable laws and regulations with respect to its activities under this Agreement including, but not limited to, export laws and regulations of the United States and other applicable jurisdictions. Further, in connection with the services performed under this Agreement and Customer’s use of the Subscription Services, the parties agree to comply with all applicable anti-corruption and anti-bribery laws, statutes and regulations.

12.4 Assignment. Customer may not assign or transfer this Agreement, whether by operation of law or otherwise, without the prior written consent of Accela, which shall not be unreasonably withheld.

Any attempted assignment or transfer, without such consent, will be null and void. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns.

12.5 Publicity. Notwithstanding anything to the contrary, each party will have the right to publicly announce the existence of the business relationship between parties without disclosing the specific terms of the Agreement.

12.6 Miscellaneous. No failure or delay by either party in exercising any right under this Agreement will constitute a waiver of that right. Other than as expressly stated herein, the remedies provided herein are in addition to, and not exclusive of, any other remedies of a party at law or in equity. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, the provision will be modified by the court and interpreted so as best to accomplish the objectives of the DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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original provision to the fullest extent permitted by law, and the remaining provisions of this Agreement will remain in effect. Accela will not be liable for any delay or failure to perform under this Agreement to the extent such delay or failure results from circumstances or causes beyond the reasonable control of Accela. This Agreement does not create a partnership, franchise, joint venture, agency, fiduciary or similar relationship between the parties. This Agreement, including any attachments hereto as mutually agreed upon by the parties, constitute the entire agreement between the parties concerning its subject matter and it supersedes all prior communications, agreements, proposals or representations, written or oral, concerning its subject matter. No modification, amendment, or waiver of any provision of this Agreement will be effective unless in writing and signed by a duly authorized representative of each party against whom the modification, amendment or waiver is to be asserted. Notwithstanding any language to the contrary, no additional or conflicting terms or conditions stated in any of Customer’s purchase order documentation or otherwise will be incorporated into or form any part of this Agreement, and all such terms or conditions shall be null and void.

13. C
ity Requirements

13.1 The following Accela policies are attached as Exhibits to this Agreement and shall take precedence over the use of other versions of these policies cited to in any order form, purchase order, statement of work, clickthrough/clickwrap, or any other agreement that is governed by this Subscription Services Agreement:
• Exhibit A – Accela Consulting Services Policy
• Exhibit B – Accela Service Availability and Security Policy • Exhibit C – Accela Support Policy SaaS
• Exhibit D – Accela Data Storage Policy

13.2 Insurance. Accela shall maintain the insurance coverage detailed in Exhibit E during the term of this Agreement.

13.3 Information Privacy Policy. Accela shall adhere to the Information Privacy Policy in Exhibit F during the term of this Agreement.

13.4 Cybersecurity Terms and Conditions. Accela shall adhere to the Cybersecurity Terms and Conditions in Exhibit G during the term of this Agreement.

F
or Accela
A
aron Haggarty
Chief Legal Officer, Secretary, & Treasurer
Date:

For City of Palo Alto
C
ity Manager
Date:

A
pproved as to form:

City Attorney or designee
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Consulting Services Policy Rev. 20210315
Accela, Inc.

Consulting Services Policy
This Consulting Services Policy (the "Policy") is binding upon execution of any order form, agreement, or statement of work (collectively and each an “Order”) between Accela and the entity receiving services (“Customer”) that incorporates the Policies by reference and are in addition to the terms and conditions for Consulting Services set forth in the License Agreement (as defined below). Accela on-premises software or subscription services for Accela software (SaaS) is governed by the license agreement between the Customer and Accela (the “License Agreement”).

Consulting Services Covered
Accela provides a variety of services covered by these policies, including but not limited to consulting, implementation, configuration, and custom training services.

Performance of Services
Accela shall provide the services in accordance with the following processes and policies:
o Accela will use reasonable efforts to meet any performance dates specified in applicable Order, and any such dates are estimates only.
o Accela will select persons and entities to perform the Consulting Services that meet industry standards for the Consulting Services' performance provided to the Customer. o Consulting Services provided by Accela on a "Time and Material" basis are not subject to acceptance criteria by the Customer, unless otherwise set forth in the applicable Order. o Consulting Services are provided eight hours a day, Monday through Friday (Accela recognized holidays excluded) during Accela regular business hours. Hours worked more than eight hours or holidays are generally subject to 2x the Consulting Services hourly or daily fee. o All Consulting Services must be scheduled. Accela will contact the Customer regarding the schedule and notify the Customer (email accepted) of the date for commencement of the Consulting Services. Unless otherwise set forth in the Customer Order, the Customer must contact Accela a minimum of five business days to reschedule the Consulting Services' start date. If the Customer does not contact Accela to reschedule the Consulting Service start date as set forth in the Customer Order or where no reschedule time is stated, a minimum of five (5) business days, the Customer is responsible for any expenses incurred by Accela due to the Customer failure to notify Accela properly. o Accela will observe all reasonable security requirements provided by the Customer to Accela in writing during access to Customer premises.
o Any changes to the Consulting Services' scope may require a signed change order detailing the changes, additional time required, and necessary variations of fees. o Accela owns all intellectual property right in all documents, work product, and other materials prepared by Accela or delivered to the Customer during the course of performing the Consulting Services, including any items identified as such in the Order (collectively, the "Deliverables”). Excluding Accela Software, and subject to the Customer payment of all fees for the Consulting Services, Accela grants the Customer a license to use the Deliverables subject to the terms and restrictions applicable to the License Agreement, as such terms apply to Accela’s software and SaaS services..

To efficiently provide the Customer with Accela Consulting Services, the Customer will:
o Secure all necessary licenses, permits, and comply will all applicable law concerning the Consulting Services before the Consulting Services start date.

Exhibit A
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Consulting Services Policy Rev. 20210315
o Provide access to the Customer premises and provide safe office accommodation and other facilities as reasonably requested by Accela to perform the Consulting Services. o Have all equipment ready and available for Accela's access to perform the Consulting Services. o Provide such materials or information as Accela may reasonably request to carry out the Consulting Services in a timely manner and ensure that such Customer materials or information are complete and accurate.
o Respond to Accela request to provide direction, information, approvals, authorizations, or decisions that are reasonably necessary for Accela to perform the Consulting Services in accordance with the requirements of the Order.
o Unless otherwise set forth in the Order, the Customer agrees to reimburse Accela for all actual, documented, and reasonable travel and out-of-pocket expense incurred by Accela in the Consulting Services' performance. Unless otherwise agreed in advance, Accela’s consultants shall travel using economy class flights, reasonable business appropriate accommodations, and standard size car rentals.

Privacy
Any personal information (PII) that the Customer provides to Accela or Accela accesses during the provisioning of the Consulting Services is subject to Accela's Privacy Policy at https://www.accela.com/privacy-policy/.The Customer represents and warrants that the Customer has received all applicable consents from persons whose personal information the Customer provides to Accela or may be accessed by Accela during Accela performance of the Consulting Services.

Supplemental Terms
For any Customer receiving Consulting Services from Accela that has not yet entered into a License Agreement, Customer, commencing on the first day Consulting Services are provided, Customer is granted a thirty (30) day license to use Deliverables (and any other Accela materials provided during such engagement , subject to the applicable License Agreement set forth at accela.com/terms/. At the end of the thirty (30) day license, if Customer has not entered into a new License Agreement referencing Consulting Services, Customer’s license to the Deliverables granted under “Supplemental Terms” of this Policy is terminated.

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20210212
Accela Availability and Security Policy
Service Availability:

Accela will use commercially reasonable efforts to (a) provide bandwidth suffi cient for Customer’s use of the Subscription Services provided hereunder and in an applicable Order Form and (b) operate and manage the Subscription Services with a ninety -nine and nine percent (99. 9%) uptime goal (the “Availability SLA”), excluding situations identified as “Excluded” below.
“Excluded" means any outage that results from any of the following:
a. Any maintenance performed by Accela during Accela’s standard maintenance windows. Accela will n
otify Customer within forty -eight (48) hours of any standard maintenance and within twenty -four (24) hours for other non -standard emergency maintenance (collectively referred to herein as “Scheduled Maintenance”). Scheduled maintenance includes off -business-hours (agency time) deployments of major releases & service packs. Major releases are deployed into an agency's non -production environments well in advance, typically 4 weeks ahead of production, to allow for adequate user acceptance testing. b. Customer’s information content or application programming, or the acts or omissions of Customer or its agents, including, without limitation, the following:

1. Any mis-configuration by Customer (as determined in Accela’s sole discretion), including, withou t l
imitation, configuration errors and bad or unintended usage of the Subscription Services.

2. Force majeure or other circumstances beyond Accela’s reasonable control that could not be avoided b
y its exercise of due care.
c. Failures of the carrier networks itself and the network by which Customer connects to the carrier networks any other network unavailability.
d. Any window of time when Customer agrees that Subscription Services availability/unavailability will not be monitored or counted.
e. Interruptions or delays in providing the Subscription Services resulting from telecommunication or Internet service provider failures.
f. Customer’s or any third party’s use of the Subscription Services in an unauthorized or unlawful manner.

Remedies for Excessive Downtime:

In the event the Availability of the Subscri ption Services falls below the Availability SLA in a given calendar month, Accela will pay Customer a service credit (“Service Credit”) equal to the percentage of the fees set forth in the table below corresponding to the actual Availability of the Subscription Services during the applicable calendar month. Such Service Credit will be issued as a credit against any fees owed by Customer for the next calendar month of the Subscription Period or, if Customer does not owe any additional fees, then Accel a will pay Customer the amount of the applicable Service Credit within thirty (30) days after the end of the calendar month in which such credit accrued. Such Service Credit will be in addition to any other remedies available to Customer at law, in equity or under this Agreement.

System availability is measured by the following formula: x = (n - y) *100 / n Exhibit B
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20210212
Notes:
(1) "x" is the uptime percentage; "n" is the total number of hours in the given calendar month minus scheduled downtime; and "y" is the total number of downtime hours in the given calendar month. (2) Specifically excluded from "n and "y" in this calculation are the exception times on scheduled upgrade and maintenance windows.

Service Availability Percentage of Monthly Service
Fees Credited
>99.9% 0%

95.0% ‐ < 99.9% 5% (max of $280)

90.0% ‐ < 95.0% 10% (max of $560)

80.0% ‐ < 90.0% 20% (max $840)

70.0% ‐ < 80.0% 30% (max of $1,120)

60.0% ‐ < 70.0% 40% (max of $1,400)
< < 60% 50% (max of $2,800)
Customer Account Login:

For Accela user interface access, Accela uses TLS 1.2 with AES 256 bit or similar encryption for protection of data in transit, which is supported by most modern browsers. Accela will also restrict applicable administrative user interface access to Customer corporate networks for additional security on written request by Customer.

Accela SaaS Service Delivery:

Accela manages its apps and infrastructures within the industry -leading Microsoft Azure hosting environment, specifically designed and constructed to deliver world - class physical security, power availability, infrastructure flexibility and growth capacity. Accela’s audit and compliance foundation includes SSAE 18 SOC 2 Type II, HIPAA, California Consumer Privacy Act (CCPA), and PCI -DSS (payment adapters). Accela’s partnership with Microsoft delivers multi -layered security in physical datacenters, infrastructure and operations, with adherence to its numerous security certifications. More infor mation can be found at https://azure.microsoft.com/en - us/overview/security/.

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Accela, Inc.

Consolidated SaaS Support Policies
This document contains two policies, the Standard Support SaaS Services and the Preferred Support SaaS Services Policies. Please refer to the appropriate section, depending on the level of Support Services you have purchased from Accela.

In the event you are unsure or wish to upgrade your Support Services Level, please contact your account manager.

Exhibit C
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Policy 1
Accela, Inc.

Standard SaaS Support Services Policy
Dated: April 21, 2021
This Accela Standard SaaS Support Services Policy (“Support Policy”) governs the terms under which Accela provides Support Services and is subject to the SaaS services agreement (“Agreement”) entered into between Accela and the recipient of such services (“Customer”).

This Support Policy may be updated from time to time by Accela in its sole discretion.

General Requirements and Hours of Operation
a. Ticketing Support: Accela will provide access to a ticketing system, which will be available twenty‐four (24) hours per day, seven (7) days per week. A qualified support specialist shall use commercially reasonably efforts to answer questions and resolve problems regarding the Subscription Service from 4 :00 A.M. until 6:00 P.M. Pacific Standard Time Monday through Friday, excluding Accela’s observed holidays. b. Telephone Support: Accela’s Customer Support Department, a live technical support facility, will be available to Customer from 4:00 A.M. until 6:00 P.M. Pacific Standard Time Monday through Friday, excluding Accela’s observed holidays. c. Online Support Material: Available twenty‐four (24) hours, seven (7) days a week, Accela will make available to Customer certain archived software updates and other technical information in Accela’s online support databases.
(1) Agency Contacts: “Agency Contacts” are the individuals who will be the primary users of the Support Plan. You may designate up to two (2) Agency Contacts and agree to let Accela know if they change.

Your Agency Contacts will be responsible for:

Overseeing your Agency’s support case activity, developing and d eploying troubleshooting processes within your Agency’s organization.

Agency will ensure Agency Contacts:

Have completed the Administrator Training offered as part of Accela’s implementation and adoption programs. Are knowledgeable about the Agency’s conf igured solution in order to assist Accela in analyzing and resolving technical issues. Have a basic understanding of any problem that is the subject of a case, and the ability to reproduce the problem in order to assist Accela in diagnosing and triaging the problem.
(2) Submitting a Case
Agency Contacts may submit cases via:
a. the online support portal by logging into the Accela Success Community at DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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https://success.accela.com and selecting Get Support > Submit a case or b. a telephone call to Customer Support as described below ( For Severity Level 1 and Severity Level 2 issues, Agency must call Customer Support) (3) Updates
Updates may address security fixes, critical patches, gener al maintenance functionality, and documentation and shall be made available at Accela’s discretion. Accela is under no obligation to develop any future functionality or enhancements unless otherwise specified in the Agreement. If an update for the Service is made available to Customer pursuant to this Support Policy, it will automatically replace the previous version of the applicable Service.

Where practical, Accela will schedule Updates during non‐business hours and will provide Customers with advance notice of all Updates.
(4) Upgrade/Downgrade of Severity Level
If, during the Support Request process, the issue either warrants assignment of a higher severity level than currently assigned or no longer warrants the severity level currently assigned based on its current impact on the production operation of the SaaS offering, then the severity level will be upgraded or downgraded accordingly to the severity level that most appropriately reflects its current impact.
(5) Customer Cooperation
Accela must be able to reproduce errors in order to resolve them. Agency agrees to cooperate and work closely with Accela to reproduce errors, including, without limitation, conducting diagnostic or troubleshooting activities, implementation of fixes or updates previously provided by Accela, or providing information as reasonably requested and appropriate. Also, Accela may access Agency Contacts account and/or an admin account and/or Agency’s personnel may be asked to provide remote access to their internal system for, w ithout limitation, conducting diagnostic or troubleshooting activities, or implementation of fixes or updates previously provided by Accela.
(6) Third Party Product Support
If any third‐party software is supplied by Accela, Accela disclaims all support obligations for such third‐party software, unless expressly specified by Accela in Customer’s Agreement. (7) Exclusions
The following Support Exclusions are not covered by this Support Policy:
a. Support required due to Customer’s or any End User’s or third party’s misuse of the Services;
b. Support during times outside of Accela’s regular business hours stated above; c. Support necessitated by external factors outside of Accela’s reasonable control, including any force majeure event or Internet access or related problems beyond the Ser vice demarcation point;
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d. Support of or caused by customizations (if outside of Accela’s best practice recommendations), configuration changes, scripting, or data loss caused by or on behalf of Customer or any End User;
e. Support of or caused by Customer’s or any End User’s or third party’s equipment, software or other technology (other than third party equipment within Accela’s direct control); f. Support to resolve or work‐around conditions which cannot be reproduced in Accela’s support environment and
g. Support of any software add‐ons supplied together with the Service (except where specified in the customer’s Agreement).

Any support services falling within these Support Exclusions may be provided by Accela at its discretion and, if so provided, may be subject to additional pricing and support terms as specified by Accela.

(8) Error Classification
Functional Definitions: For the purposes of error classification, essential or major functions include: data capture features, SLA and alarming features, performance management features and application performance problem resolution features.

Severity Definition
Level 1 Supported Product is non‐functional or seriously affected and there is no reasonable workaround available (e.g. business is halted).

Level 2 Supported Product is affected and there is no workaround available or the workaround is impractical (e.g. Supported Product response is very slow, day to day operations continue but are impacted by the work around).

Level 3 Supported Product is non‐functional however a convenient workaround exists
(e.g. non‐critical feature is unavailable or requires additional user intervention).

Level 4 Supported Product works, but there is a minor problem (e.g. incorrect label, or
cosmetic defect).

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(9) Target Initial Response Time
Accela will use commercially reasonable efforts to respond to each case within the applicable response time described in the table below:

Target Initial Response Time by Case Severity
Severity Level Target Initial Response Time
1 1 daya
2 3 daysa
3 5 daysa
4 7 daysa
a Initial response times are including M‐F, 4 am to 6 pm PT, excluding weekends and holidays. Severity Level 1 and 2 cases must be submitted via telephone as described above. Severity Level 1 and 2 target initial response times do not apply to cases submitted via email or electronically via the Accela Success Community.

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Policy 2
Accela, Inc.

Preferred SaaS Support Policy
Dated: April 21, 2021
This Accela Preferred SaaS Support Services Policy (“Support Policy”) governs the terms under which Accela provides Support Services and is subject to the SaaS services agreement (“Agreement”) entered into between Accela and the recipient of such services (“Customer”). This Support Policy may be updated from time to time by Accela in its sole discretion. This policy only applies to Customers that have purchased Preferred Level Support.

General Requirements and Hours of Operation
a. Ticketing Support: Accela will provide access to a ticketing system, which will be available twenty‐four (24) hours per day, seven (7) days per week. A qualified support specialist shall use commercially reasonably efforts to answer questions and resolve problems regarding the Subscription Service from 4:00 A.M. until 6:00 P.M. Pacific Standard Time Monday through Friday, excluding Accela’s observed holidays.
b. Telephone Support: Accela Customer Support Department, a live technical support facility, will be available in English to your identified Agency Contacts twenty‐four hours a day, seven days a week (including weekends and holidays). Telephone support will be handled via a dedicated Preferred Support line. Access to Accela self‐service resources is available 24x7 through the Accela Success Community site. Cases may be handled by a triage agent, who will document the case and route it to the appropriate Accela support engineer for resolution.

Accela support engineers will follow through on the case for the Agency Contacts. Actual resolution time will vary. Resolutions can take many forms – a workaround, code update, user training, or other solution.
c. Online Support Material: Available twenty‐four (24) hours, seven (7) days a week, Accela will make available to Customer certain archived software updates and other technical information in Accela’s online support databases.
(1) Agency Contacts: “Agency Contacts” are the individuals who will be the primary users of the Support Plan. You may designate up to ten (10) Agency Contacts and agree to let Accela know if they change.

Your Agency Contacts will be responsible for:

Overseeing your Agency’s support case activity, developing and deploying troubleshooting processes within your Agency’s organization.

Agency will ensure Agency Contacts:

Have completed the Administrator Training offered as part of Accela’s implementation and adoption programs. Are knowledgeable about the Agency’s configured solution in order to assist Accela in analyzing and resolving technical issues. Have a basic understanding of any problem that is the subject of a case, and the ability to reproduce the problem in order to assist Accela in diagnosing and triaging the problem.

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(2) Submitting a Case: Agency Contacts may submit cases via:
a. the online support portal by logging into the Accela Success Community at https://success.accela.com and selecting Get Support > Submit a case or b. a telephone call to Customer Support as described below (For Severity Level 1 and Severity Level 2 issues, Agency must call Customer Support) (3) Updates: Updates may address security fixes, critical patches, general maintenance functionality, and documentation and shall be made available at Accela’s discretion. Accela is under no obligation to develop any future functionality or enhancements unless otherwise specified in the Agreement. If an update for the Service is made available to Customer pursuant to this Support Policy, it will automatically replace the previous version of the applicable Service.

Where practical, Accela will schedule Updates during non‐business hours and will provide Customers with advance notice of all Updates.
(4) Upgrade/Downgrade of Severity Level: If, during the Support Request process, the issue either warrants assignment of a higher severity level than currently assigned or no longer warrants the severity level currently assigned based on its current impact on the production operation of the SaaS offering, then the severity level will be upgraded or downgraded accordingly to the severity level that most appropriately reflects its current impact. (5) Customer Cooperation: Accela must be able to reproduce errors in order to resolve them.

Agency agrees to cooperate and work closely with Accela to reproduce errors, including conducting diagnostic or troubleshooting activities, implementation of fixes or updates previously provided by Accela, or providing information as reasonably requested and appropriate. Also, Accela may access Agency Contacts account and/or an admin account and/or Agency’s personnel may be asked to provide remote access to their internal system for, without limitation, conducting diagnostic or troubleshooting activities, or implementation of fixes or updates previously provided by Accela.
(6) Third Party Product Support: If any third‐party software is supplied by Accela, Accela disclaims all support obligations for such third‐party software, unless expressly specified by Accela in Customer’s Agreement.
(7) Named Technical Support Advisor: Accela will provide a named technical support advisor for any Preferred support plan holders. The technical support advisor will have knowledge of the customers system and provide oversite for any support cases created with Accela. They will also facilitate the following:

1. Scheduled calls to review open support tickets with Accela and

2. a monthly service review to review overall support performance.

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(8) Monthly APO Data Loads: Included with the Preferred support plan is a monthly upload of APO data to your hosted environment. This must be requested following the methods outlined in the case submission process in this document. All APO load cases will be addressed as a Sev3 severity level case.
(9) Exclusions: The following Support Exclusions are not covered by this Support Policy:
a. Support required due to Customer’s or any End User’s or third party’s misuse of the Services;
b. Support during times outside of Accela’s regular business hours stated above; c. Support necessitated by external factors outside of Accela’s reasonable control, including any force majeure event or Internet access or related problems beyond the Service demarcation point;
d. Support of or caused by customizations (if outside of Accela’s best practice recommendations), configuration changes, scripting, or data loss caused by or on behalf of Customer or any End User;
e. Support of or caused by Customer’s or any End User’s or third party’s equipment, software or other technology (other than third party equipment within Accela’s direct control);
f. Support to resolve or work‐around conditions which cannot be reproduced in Accela’s support environment and
g. Support of any software add‐ons supplied together with the Service (except where specified in the Agreement).

Any support services falling within these Support Exclusions may be provided by Accela at its discretion and, if so provided, may be subject to additional pricing and support terms as specified by Accela.
(10) Error Classification:

Functional Definitions: For the purposes of error classification, essential or major functions include: data capture features, SLA and alarming features, performance management features and application performance problem resolution features.

Severity Definition
Level 1 Supported Product is non‐functional or seriously affected and there is no reasonable workaround available (e.g. business is halted).

Level 2 Supported Product is affected and there is no workaround available or the workaround is impractical (e.g. Supported Product response is very slow, day to day operations continue but are impacted by the work around).

Level 3 Supported Product is non‐functional however a convenient workaround exists (e.g. non‐critical feature is unavailable or requires additional user intervention).

Level 4 Supported Product works, but there is a minor problem (e.g. incorrect label, or cosmetic defect).

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(11) Target Initial Response Time: Accela will use commercially reasonable efforts to respond to each case within the applicable response time described in the table below:

Target Initial Response Time by Case Severity
Severity Level Target Initial Response Time
1 1 houra
2 4 hoursa
3 8 hoursa
4 24 hoursa
a Initial response times are 24x7, including weekends and holidays. Severity Level 1 and 2 cases must be submitted via telephone as described above. Severity Level 1 and 2 target initial response times do not apply to cases submitted electronically.

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20210723
ACCELA, INC.

DATA STORAGE POLICY
The Licensee’s subscription comes with a limit of 2.5TB data storage for all cloud environments. Data storage includes:
• Transaction data;
• Reference data;
• Configuration data;
• Documents and Report Files;
• Backup copies; and
• Other data stored by Accela on behalf of the customer.

A
dditional storage can be purchased from Accela in blocks of 500GB, with a price of one thousand dollars ($1,000) per year. When Licensee approaches the 2.5TB limit, it will begin receiving monthly notifications highlighting data usage levels across its environment. Once the 2.5TB limit is reached, a charge of one thousand dollars ($1,000) for an additional 500GB will be automatically added to the Licensee’s subscription renewal.

D
ata Retention
If the Licensee’s Software as a Service (“SaaS”) subscription expires or is otherwise terminated, Contractor will initiate its data retention processes, including the deletion of licensee data from systems directly controlled by Contractor.
• If a Licensee’s SaaS subscription expires or is otherwise terminated, Contractor will store its customer data, as defined in the master agreement between Licensee and Contractor, for ninety (90) days (the “Retention Period”). During the Retention Period, provide Licensee with a notice indicating its intention to delete its Customer Data. • After the Retention Period, Contractor will, within a commercially reasonable amount of t
ime, disable the account and delete the customer data, including any cached or backup copies.

H
istory and log data will be available to customers in real-time for up to 2 years in production and 1 year in non-production, unless otherwise specified. After 2 years, the history data will be archived and retained for up to 7 years. This data will be provided to the customer upon request.

F
requently Asked Questions
Can Licensee track its storage usage on the Accela Cloud? It's not currently possible to track storage usage in the Civic Platform application. However, Licensee will receive a report detailing its data usage annually, at the time of renewal. Licensee can request this information at any time outside of the renewal period by submitting a support case through Accela Customer Support. When Licensee approaches the storage limit, it will receive monthly notifications particularizing its storage usage.

Wha
t will happen if Licensee exceeds its storage limit?
If Licensee’s Accela Cloud instance exceeds the storage limit, it will receive notification and a charge of one thousand ($1,000) per 500GB of usage will be billed at the time of subscription Exhibit D
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20210723
renewal.

Can I increase my storage limit?
Yes. Storage limits can be increased by purchasing additional storage in blocks of 500GB at one thousand dollars ($1,000) per year.

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EXHIBIT “E”

INSURANCE REQUIREMENTS
C

ONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT

OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A -:VII, OR HIGHER, AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.

AW
ARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS SPECIFIED HEREIN.

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS
EACH

OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY

STATUTORY

STATUTORY

YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY,

BROAD FORM PROPERTY DAMAGE BLANKET

CONTRACTUAL, PRODUCTS/COMPLETED

OPERATIONS AND FIRE LEGAL LIABILITY

BODILY INJURY
PR

OPERTY DAMAGE

BODILY INJURY & PROPERTY
DAMAGE COMBINED.
$2,000,000
$2,
000,000
$2,
000,000*
$2,000,000
$2,
000,000
$2,
000,000

YES TECHNOLOGY ERRORS AND OMISSIONS LIABILITY
COVERAGE. THE POLICY SHALL AT A MINIMUM

COVER PROFESSIONAL MISCONDUCT FOR THE

PERFORMANCE OF SERVICES DEFINED IN THE

CONTRACT AND SHALL ALSO PROVIDE COVERAGE
FOR THE FOLLOWING RISKS:
(i) NETWORK SECURITY LIABILITYARISING

FROM UNAUTHORIZED ACCESS TO, USE OF, OR

TAMPERING WITH COMPUTERS OR COMPUTER

SYSTEMS, INCLUDING HACKERS, EXTORTION, AND
(ii) LIABILITY ARISING FROM INTRODUCTION

OF ANY FORM OF MALICIOUS SOFTWARE

INCLUDING COMPUTER VIRUSES INTO, OR
OTHERWISE CAUSING DAMAGE TO THE CITY’S OR
THIRD PERSON’S COMPUTER, COMPUTER SYSTEM,

NETWORK, OR SIMILAR COMPUTER RELATED

PROPERTY AND THE DATA, SOFTWARE AND
PROGRAMS THEREON.

CONTRACTOR SHALL MAINTAIN IN FORCE DURING
THE FULL LIFE OF THE CONTRACT.

T

HE POLICY SHALL PROVIDE COVERAGE FOR

BREACH RESPONSE COSTS AS WELL AS

REGULATORY FINES AND PENALTIES AS WELL AS

CREDIT MONITORING EXPENSES WITH LIMITS
SUFFICIENT TO RESPOND TO THESE OBLIGATIONS.

ALL DAMAGES $2,000,000
per claim*
$2,000,000
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YES CYBER AND PRIVACY INSURANCE.

SUCH INSURANCE SHALL INCLUDE COVERAGE FOR

LIABILITY ARISING FROM COVERAGE IN AN

AMOUNT SUFFICIENT TO COVER THE FULL

REPLACEMENT VALUE OF DAMAGE TO,

ALTERATION OF, LOSS OF, THEFT, DISSEMINATION

OR DESTRUCTION OF ELECTRONIC DATA AND/OR

USE OF CONFIDENTIAL INFORMATION,
“PROPERTY” OF THE CITY OF PALO ALTO THAT

WILL BE IN THE CARE, CUSTODY, OR CONTROL OF

VENDOR, INFORMATION INCLUDING BUT NOT

LIMITED TO, BANK AND CREDIT CARD ACCOUNT

INFORMATION OR PERSONAL INFORMATION,

SUCH AS NAME, ADDRESS, SOCIAL SECURITY

NUMBERS, PROTECTED HEALTH INFORMATION OR

OTHER PERSONAL IDENTIFICATION INFORMATION,
STORED OR TRAMSITTED IN ELECTRONIC FORM.

ALL DAMAGES $2,000,000 $2,000,000
Y

ES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED,
HIRED, NON-OWNED, AS APPLICABLE.

BODILY INJURY

EACH PERSON

EACH OCCURRENCE
P

ROPERTY DAMAGE

BODILY INJURY AND PROPERTY

DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000
$1,
000,000
$1,
000,000
$1,000,000
$1,000,000
$1,000,000
$1,
000,000
$1,
000,000
YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE,

SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT

AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND

CYBER LIABILITY/TECHNOLOGY ERRORS & OMISSIONS, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
* These limits can be satisfied with a combination of primary General Liability and Umbrella/Excess policies.

I. INSURANCE COVERAGE MUST INCLUDE:

A. A C
ONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.

II. CO

NTRACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569.

III. E
NDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE
W

ITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS

AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.

B. CROSS LIABILITY
T

HE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL

NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOT HER, BUT THIS

ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.

C. NOTICE OF CANCELLATION
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1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

2. I

F THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL:

HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR
HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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Item 7: Staff Report
Pg.
34 Packet Pg. 414 of 638

POLICY S
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DocuSign Envelope ID: 87E1232D-F46E-405A-95CD-91CC38106A93 Exhibit F
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POLICY AND PROCEDURES 1‐64/IT
Revised: December 2017

The  goals  and  objectives  of  the  Policy  are:  (a)  a  safe,  productive,  and  inoffensive  work environmen
t  for  all  users  having  access  to  the  City’s  applications  and  databases;  (b)  the appropriate maintenance and security of database information assets owned by, or entrusted to, the City; (c) the controlled access and security of the Infor mation  provided to the City’s staff and third party contractors; and (d) faithful compliance with legal and regulatory requirements.

SCOPE
The  Policy  will  guide  the  City’s  staff  and,  indirectly,  third  party  contractors,  which  are  by contract required to protect the confidentiality and privacy of the Information of the persons whose  personal  information  data  ar e  intended  to  be  covered  by  the Policy  and which  will  be advised by City staff to conform their performances to the Policy should they enjoy conditional access to that information.

CONSEQUENCES
The City’s employees shall comply with the Policy in the execution of their official duties to th e extent  their  work  implicates  access  to  the  Information  referred  to  in  this  Policy.   A  failure  to comply may result in employment and/or legal consequences.

EXCEPTIONS
In the event that a City employee cannot fully comply with one or more element(s) described in this Policy, the employee may request an exc eption  by submitting Security Exception Request.

The  exception  request  will  be  reviewed  and  administered  by  the  City’s  Information  Security Manager  (the  “ISM”).   The  employee,  with  the  approval  of  his  or  her  supervisor,  will  provide any  additional  information  as  may  be  requested  by  the  ISM.  The  ISM  will  conduct  a  risk assessment  of  the  requested  exc
eption  in  accordance  with  guidelines  approved  by  the  City’s Chief  Information  Officer  (“CIO”)  and  approved  as  to  form  by  the  City  Attorney.  The  Policy’s guidelines  will  include  at  a  minimum:  purpose,  source,  collection,  storage,  access,  retention, usage, and protection of the Information identified in the request. The ISM will consult with the CIO to approve or deny the ex
ception request.  After due consideration is given to the request, the exception request disposition will be communicated, in writing, to the City employee and his  or  her  supervisor.  The  approval  of  any  request  may  be  subject  to  countermeasures established by the CIO, acting by the ISM.

MUNICIPAL ORDINANCE
This Policy will supersede any Cit
y policy, rule, regulation or procedure regarding information privacy.

RESPONSIBILITIES OF CITY STAFF
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POLICY AND PROCEDURES 1‐64/IT
Revised: December 2017

A. RESPONSIBILITY OF CIO AND ISM
The CIO, act
ing by the ISM, will establish an information security management framework to  initiate  and  coordinate  the  implementation  of  information  security  measures  by  the City’s government.

The  City’s  employees,  in  particular,  software  application  users  and  database  users,  and, indirectly,  third  party  contractors  under  contract  to  the  City  to  provi de  services,  shall  by guided by this Policy in the performance of their job responsibilities.

The  ISM  will  be  responsible  for:  (a)  developing  and  updating  the  Policy,  (b)  enforcing compliance  with  and  the  effectiveness  of  the  Policy;  (c)  the  development  of  privacy standards that will manifest the Policy in detailed, auditable technical requirements, which will be desig
ned and maintained by the persons responsible for the City’s IT environments; (d) assisting the City’s staff in evaluating security and privacy incidents that arise in regard to  potential  violations  of  the  Policy;  (e)  reviewing  and  approving  department‐specific policies and procedures which fall under the purview of this Policy; an d (f) reviewing Non‐ Disclosure Agreements (NDAs) signed by third party contractors, which will provide services, including, without limitation, local or ‘cloud‐based’ software services to the City.

B. RESPONSIBILITY OF INFORMATION SECURITY STEERING COMMITTEE The Information Security Steering Committee (the “ISSC”), which is comprised of th e City’s employees,  drawn  from  the  various  City  departments,  will  provide  the  primary  direction, prioritization  and  approval  for  all  information  security  efforts,  including  key  information security and privacy risks, programs, initiatives and activities. The ISSC will provide input to the information security and privacy strategic planning processes to ens ure that information security  risks  are  adequately  considered,  assessed  and  addressed  at  the  appropriate  City department level.

C. RESPONSIBILITY OF USERS
All authorized users of the Information will be responsible for complying with information privacy processes and technologies within the scope of responsibility of each user.

D. RESPONSIBILITY OF INFORMATION TECHNOLOGY (IT) MANAGERS The  City’s  IT  Managers,  who  are  responsible  for  internal,  extern al,  direct  and  indirect
connections  to  the  City’s  networks,  will  be  responsible  for  configuring,  maintaining  and securing  the  City’s  IT  networks  in  compliance  with  the  City’s  information  security  and privacy policies. They are also responsible for timely int ernal  reporting of events that may have compromised network, system or data security.

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POLICY AND PROCEDURES 1‐64/IT
Revised: December 2017

E. RESPONSIBILITY OF AUTHORIZATION COORDIN ATION
The  ISM  will  ensure  that  the  City’s  employees  secure  the  execution  of  Non‐Disclosure Agreements  (NDA),  whenever  access  to  the  Information  will  be  granted  to  third  party contractors, in conjunction with the Software as a Service (SaaS) Security and Privacy Terms and  Conditions.   An  NDA  must  be  executed  prior  to  th e  sharing  of  the  Information  of persons covered by this Policy with third party contractors. The City’s approach to managing information  security  and  its  implementation  (i.e.  objectives,  policies,  processes,  and procedures for information security) will be reviewed independently by the ISM at planned intervals, or whenever significant ch anges to security implementation have occurred.

The CIO, acting by the ISM, will review and recommend changes to the Policy annually, or as appropriate, commencing from the date of its adoption.

GENERAL PROCEDURE FOR INFORMATION PRIVACY
A. OVERVIEW
The Policy applies to activities that involve the use of the City’s information assets, namel y, the Information of persons doing business with the City or receiving services from the City, which  are  owned  by,  or  entrusted  to,  the  City  and  will  be  made  available  to  the  City’s employees and third party contractors under contract to the City to provide Software as a Service  consulting  services.  These  activities  include,  wit hout  limitation,  accessing  the Internet, using e‐mail, accessing the City’s intranet or other networks, systems, or devices.

The  term  “information  assets”  also  includes  the  personal  information  of  the  City’s employees  and  any  other  related  organizations  while  those  assets  are  under  the  City’s control.  Security measu res  will be designed, implemented, and maintained to ensure that only authorized persons will enjoy access to the information assets. The City’s staff will act to protect its information assets from theft, damage, loss, compromise, and inappropriate disclosure  or  alteration.  The  City  will  plan,  design,  implement  and  maintain  information management  systems,  networks  and  proces ses  in  order  to  assure  the  appropriate confidentiality,  integrity,  and  availability  of  its  information  assets  to  the  City’s  employees and authorized third parties.

B. PERSONAL INFORMATION AND CHOICE
Except as permitted or provided by applicable laws, the City will not share the Information of any person doing business with the City, or receiving services from the City, in viol ation of this  Policy,  unless  that  person  has  consented  to  the  City’s  sharing  of  such  information during  the  conduct  of  the  City’s  business  as  a  local  government  agency  with  third  parties under contract to the City to provide services.

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POLICY AND PROCEDURES 1‐64/IT
Revised: December 2017

C. METHODS OF COLLECTION OF PERSONAL INFOR MATION
The City may gather the Information from a variety of sources and resources, provided that the collection of such information is both necessary and appropriate in order for the City to conduct  business  as  a  local  government  agency  in  its  governmental  and  proprietary capacities.   That  information  may  be  gathered  at  service  windows  and  contact  centers  as well as at web sites, by mobile applications, and with other technologies, wherever the Cit y
may interact with persons who need to share such formation in order to secure the City’s services.

The  City’s  staff  will  inform  the  persons  whose  Information  are  covered  by  this  Policy  that the City’s web site may use “cookies” to customize the browsing experienc e with the City of
Palo Alto web site.  The City will note that a cookie contains unique information that a web site can use to track, among others, the Internet Protocol address of the computer used to access  the  City’s  we
b  sites,  the  identification  of  the  browser  software  and  operating systems used, the date and time a user accessed the site, and the Internet address of the website  from  which  the  user  linked  to  the  City’s  web  sites.  Cookies  created  on  the  user’s computer  by  using  the  City’s  web  site  do  not  contain  th e  Information,  and  thus  do  not
compromise the user’s privacy or security. Users can refuse the cookies or delete the cookie files from their computers by using any of the widely available methods. If the user chooses not to accept a cookie on his or he r computer, it will not prevent or prohibit the user from gaining access to or using the City’s sites.

D. UTILITIES SERVICE
In the provision of utility services to persons located within Palo Alto, the City of Palo Alto Utilities Department  (“CPAU”) will collect the Information in order  to initiate and manage utility  services  to  customers.   To  the  extent  the  manag ement  of  that  information  is  not
specifically  addressed  in  the  Utilities  Rules  and  Regulations  or  other  ordinances,  rules, regulations  or  procedures,  this  Policy  will  apply;  provided,  however,  any  such  Rules  and Regulations  must  conform  to  this  Policy,  unless  otherwise  directed  or  approved  by  the Council.  Th
is  includes  the  sharing  of  CPAU‐collected  Information  with  other  City departments except as may be required by law.

Businesses and residents with standard utility meters and/or having non‐metered monthly services  will  have  secure  access  through  a  CPAU  website  to  their  Information,  including, without limitation, their monthly utility usage and billing data. In addition to their regula r
monthly  utilities  billing,  businesses  and  residents  with  non‐standard  or  experimental electric, water or natural gas meters may have their usage and/or billing data provided to them  through  non‐City  electronic  portals  at  different  in tervals  than  with  the  standard monthly billing.

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Businesses and residen ts with such non‐standard or experimental metering will have their Information  covered  by  the  same  privacy  protections  and  personal  information  exchange rules applicable to Information under applicable federal and California laws.

E. PUBLIC DISCLOSURE
The Information that is collected by the City in the ordinary course and scope of conducting its business could be incorporated in a public re
cord that may be subject to inspection and
copying  by the  public, unless  such  information  is  exempt  from  disclosure  to  the  public  by California law.

F. ACCESS TO PERSONAL INFORMATION
The  City  will  take  reasonable  steps  to  verify  a  person’s  identity  before  the  Cit y  will  grant anyone  online  access  to  that  person’s  Information.  Each  City  department  that  collects Information  will  afford  access  to  affected  persons  who  can  review  and  update  that information at reasonable times.

G. SECURITY, CONFIDENTIALITY AND NON‐DISCLOSURE
Except  as  otherwise  provided  by  applicable  law  or  this  Policy,  the  City  w ill  treat  the Information  of  persons  covered  by  this  Policy  as  confidential  and  will  not  disclose  it,  or permit it to be disclosed, to third parties without the express written consent of the person affected.  The  City  will  develop  and  maintain  reasonable  controls  that  are  designed  to protect the confidentiality and security of the Inf ormation of persons covered by this Policy.

The City may authorize the City’s employee and or third party contractors to access and/or use the Information of persons who do business with the City or receive services from the City.  In  those  instances,  the  City  will  require  the  City’s  employee  an d/or  the  third  party contractors  to  agree  to  use  such  Information  only  in  furtherance  of  City‐related  business and in accordance with the Policy.

If the City becomes aware of a breach, or has reasonable grounds to believe that a security breach  has  occurred,  with  respect  to  the  Inf ormation   of  a  person,  the  City  will  notify  the affected person of such breach in accordance with applicable laws. The notice of breach will include  the  date(s)  or  estimated  date(s)  of  the  known  or  suspected  breach,  the  nature  of the Information that is the subject of the breach, and the proposed action to be taken or the responsive action taken by the City.

H. DATA RETENTION / INF
ORMATION RETENTION
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The City will store and secure all Information for a period of time as ma y be required by law, or  if  no  period  is  established  by  law,  for  seven  (7)  years,  and  thereafter  such  information will be scheduled for destruction.

I. SOFTWARE AS A SERVICE (SAAS) OVERSIGHT
The  City  may  engage  th ird  party  contractors  and  vendors  to  provide  software  application and database services, commonly known as Software‐as‐a‐Service (SaaS).

In order to assure the privacy and security of the Information of those who do business with the  City  and  those  who  received  services  from  the  City,  as  a  condition  of  selling  goods and/or  services  to  the  City,  the  S
aaS  services  provider  and  its  subcontractors,  if  any, including any IT infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, while it performs such services and/or furnishes goods to the City, to the extent any scope of work or services implicates th e confidentiality and privacy of the Information.

These  requirements  include  information  security  directives  pertaining  to:  (a)  the  IT infrastructure,  by which the services are  provided to the City, including connection to the City's  IT  systems;  (b)  the  SaaS  services  provider’s  operations  and  maintenance  processes needed to support the IT environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and  reliable  environment  and  service  avail
ability  to  the  City.  The  term  “IT  infrastructure” refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate.

Prior  to  entering  into  an  agreem
ent  to  provide  services  to  the  City,  the  City’s  staff  will require  the  SaaS  services  provider  to  complete  and  submit  an  Information  Security  and Privacy Questionnaire. In the event that the SaaS services provider reasonably determines that  it  cannot  fulfill  the  information  security  requirements  during  the  course  of  p roviding services, the City will require the SaaS services provider to promptly inform the ISM.

J. FAIR AND ACCURATE CREDIT TRANSACTION ACT OF 2003
CPAU  will  require  utility  customers  to  provide  their  Information  in  order  for  the  City  to initiate and manage utility services to them.

Federal  re
gulations,  implementing  the  Fair  and  Accurate  Credit  Transactions  Act  of  2003 (Public  Law  108‐159),  including  the  Red  Flag  Rules,  require  that  CPAU,  as  a  “covered financial institution or creditor” which provides services in advance of payment and which can  affect  consumer  credit,  develop  and  implement  procedures  for  an  identit y  theft program for new and existing accounts to detect, prevent, respond and mitigate potential identity theft of its customers’ Information.

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CPAU  procedures  for  potential  identity  theft  will  be  reviewed  independently  by  the  ISM annually  or  whenever  significant  ch
anges  to  security  implementation  have  occurred.  The ISM will recommend changes to CPAU identity theft procedures, or as appropriate, so as to conform to this Policy.

There  are  California  laws  which  are  applicable  to  identity  theft;  they  are  set  for th  in California Civil Code § 1798.92.

NOTE:  Questions  regarding  this  policy  should  be  referred  to  the  Information  Technology Department, as appropriate.

Recommended:     __________________________________  ________________ Director Information Technology/CIO Date
Approved:
___________________________________  _________________
City Manager  Date
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EXHIBIT “G”

CYBERSECURITY TERMS AND CONDITIONS
I
n order to assure the privacy and security of the personal information of the City 's customers and people who do business with the City, including, without limitation, vendors, utility customers, library patrons, and other individuals and companies, who are required to share such information with the City, as a condition of receiving services from the City or selling goods and services to the City, including, without limitation, the Software as a Service services provider (the "Consultant") and its subcontractors, if any, including, without limitation, any Information Technology ("IT") infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, described below, while it renders and performs the Services and furnishes goods, if any, described in the Statement of Work, Exhibit B, to the extent any scope of work implicates the confidentiality and privacy of the personal information of the City's customers. The Consultant shall fulfill the data and information security requirements (the "Requirements") set forth in Part A below.

A "s
ecure IT environment" includes (a) the IT infrastructure, by which the Services are provided to the City, including connection to the City's IT systems; (b) the Consultant's operations and maintenance processes needed to support the environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City . "IT infrastructure" refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate.

I
n the event that, after the Effective Date, the Consultant reasonably determines that it cannot fulfill the Requirements, the Consultant shall promptly inform the City of its determination and submit, in writing, one or more alternate countermeasure options to the Requirements (the "Alternate Requirements" as set forth in Part B), which may be accepted or rejected in the reasonable satisfaction of the Information Security Manager (the "ISM").

Part A. Requirements:

The C
onsultant shall at all times during the term of any contract between the City and the Consultant:
(
a) Appoint or designate an employee, preferably an executive officer, as the security liaison to the City with respect to the Services to be performed under this Agreement. (b) Comply with the City's Information Privacy Policy:
(c) H ave adopted and implemented information security and privacy policies that are documented, are accessible to the City , and conform to ISO 27001/2 – Information Security Management Systems (ISMS) Standards. See the following:
http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=42103 http://www.iso.org/iso/iso_catalogue/catalogue_tc/catalogue_detail.htm?csnumber=50297 (d) Conduct routine data and information security compliance training of its personnel that is appropriate to their role.
(e) Develop and maintain detailed documentation of the IT infrastructure, including software versions and patch levels.
(f) Develop an independently verifiable process, consistent with industry standards, for performing professional and criminal background checks of its employees that (1) would permit verification of employees' personal identity and employment status, and (2) would enable the immediate denial of access to the City's confidential data and information by any of its employees who no DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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longer would require access to that information or who are terminated. (g) Provide a list of IT infrastructure components in order to verify whether the Consultant has met or has failed to meet any objective terms and conditions. (h) I mplement access accountability (identification and authentication) architecture and support role-based a ccess control ( "RBAC") and segregation of duties ( "SoD") mechanisms for all personnel, systems, and Software used to provide the Services. "RBAC" refers to a computer systems security approach to restricting access only to authorized users. "SoD" is an approach that would require more than one individual to complete a security task in order to promote the detection and prevention of fraud and errors.
(i) A ssist the City in undertaking annually an assessment to assure that: (1) all elements of the Services' environment design and deployment are known to the City, and (2) it has implemented measures in accordance with industry best practices applicable to secure coding and secure IT architecture.
(j) P rovide and maintain secure intersystem communication paths that would ensure the confidentiality, integrity, and availability of the City's information. (k) D eploy and maintain IT system upgrades, patches and configurations conforming to current patch and/or release levels by not later than one (1) week after its date of release. Emergency security patches must be installed within 24 hours after its date of release. (l) P rovide for the timely detection of, response to, and the reporting of security incidents, including on-going incident monitoring with logging.
(m) Notify the City within twenty -four (24) hour of detecting a security incident that results in the unauthorized access to or the misuse of the City's confidential data and information. (n) Inform the City that any third party service provider(s) meet(s) all of the Requirements. (o) Perform security self-audits on a regular basis and not less frequently than on a quarterly basis, and provide the required summary reports of those self -audits to the ISM on the annual anniversary date or any other date agreed to by the Parties. (p) Reserved.
(q) Cooperate with the City to ensure that to the extent required by applicable laws, rules and regulations, and the Confidential Information will be accessible only by the Consultant and any authorized third-party service provider's personnel.
(r) P erform regular, reliable secured backups of all data needed to maximize the availability of the Services. Adequately encrypt the City of Palo Alto's data, during the operational process, hosted at rest, and the backup stage at the Vendors' environment (including Vendor's contracting organization's environment).
(s) M aintain records relating to the Services for a period of three (3) years after the expiration or earlier termination of this Agreement and in a mutually agreeable storage medium. Within thirty (30) days after the effective date of expiration or earlier termination of this Agreement, all of those records relating to the performance of the Services shall be provided to the ISM. (t) Maintain the Confidential Information in accordance with applicable federal, state, and local data and information privacy laws, rules, and regulations.
(u) Encrypt the Confidential Information before delivering the same by electronic mail to the City and or any authorized recipient.
(v) Provide Network Layer IP filtering services to allow access only from the City of Palo Alto's IP address to the Vendor environment (primarily hosted for the City of Palo Alto). (w) Offer a robust disaster recovery and business continuity (DR-BCP) solutions to the City for the systems and services the Vendor provides to the City.
(x) Provide and support Single Sign- on (SSO) and Multifactor Authentication (MFA) solutions for authentication and authorization services from the "City's environment to the Vendor's environment," and Vendor's environment to the Vendor's cloud services/hosted environment ." The Vendor shall allow two employees of the City to have superuser and super -admin access to the Vendor's IT environment, and a cloud-hosted IT environment belongs to the City.

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(y) Unless otherwise addressed in the Agreement, shall not hold the City liable for any direct, indirect or punitive damages whatsoever including, without limitation, damages for loss of use, data or profits, arising out of or in any way connected with the City 's IT environment, including, without limitation, IT infrastructure communications.
(z) The Vendor must provide evidence of valid cyber liability insurance policy per the City’s EXHIBIT “E” INSURANCE REQUIREMENTS.

Part B. Alternate Requirements:

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Time and Materials Statement of Work Page 1 of 9
St
atement of Work
City of Palo Alto, CA
Acce
la Premium Citizen Experience (PCE) Connector Configuration July 25, 2023
V
ersion 1
A
ccela, Inc.
2633 Camino Ramon
Suite 120
San Ramon, CA 94583
Tel: 925-659-3200
S
OW expires on 10/31/2023
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TABLE OF CONTENTS
DOCUMENT CONTROL .................................................................................................................................................................... 3 INTRODUCTION ................................................................................................................................................................................ 4 SUMMARY ......................................................................................................................................................................................... 4 WORK DETAILS 4
ADMINISTRATION ............................................................................................................................................................................. 5 PROJECT TIMELINE ERROR! BOOKMARK NOT DEFINED.

PROJECTS PUT ON HOLD AND AGENCY DELAYS ERROR! BOOKMARK NOT DEFINED.

PAYMENT TERMS 5
EXPENSES 6
CONTRACT SUM 6
CHANGE ORDERS 6
EXPIRATION 6
DISCLAIMERS 7
ASSUMPTIONS ................................................................................................................................................................................. 7 GENERAL SCOPE ASSUMPTIONS 7
ACCELA TECHNICAL ASSUMPTIONS 8
SIGNATURES .................................................................................................................................................................................... 9 DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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DOCUMENT CONTROL
D
ate Author Version Change Reference
07/25/2023 MParthum 1.0 SOW Updates
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INTRODUCTION
This Statement of Work (“SOW”) dated 07/25/2023 sets forth the scope and definition of the project-based professional services (collectively, the “Services”) to be provided by Accela, Inc., its affiliates and/or agents (“Accela”) to City of Palo Alto, CA. (“Agency” or “Customer”).

This SOW is governed by the Accela Consulting Services Policy found at www.accela.com/terms.

Notwithstanding anything to the contrary, Accela is not assigning or licensing any intellectual property to Customer under this SOW.

SUMMARY
This document outlines the configuration for the Accela Premium Citizen Experience (PCE) powered by OpenCities which provides a standard look and feel for all areas of your branded department website including specific workflows for services. We are intent on delivering a webpage that lives within the constructs of the current Agency website to serve as a Departmental Portal and delivers a unique, seamless integration between government websites, forms, and transactional online services (i.e. Accela Civic Platform) to unify and simplify the user experience for citizens.

WORK DETAILS
This section details the deliverables that will be performed by Accela Professional Services.

Project Management
Project management will be required for scheduling, planning, coordination and communication. Project management hours will be deducted from the total hours contracted.

Description Tasks
Design, Configuration, &
Training
• Branding and Data Premium Citizen Experience integration consulting
• Accela Integration training and consultation

DESIGN, CONFIGURATION, & TRAINING – ACCELA
Accela Premium Citizen Experience Branding and Data Integration Configuration – Configuration will be done in global settings in ACA. Specifically, the global settings will include configuration of the “Site Brand Builder” section. Standard choices will be configured as part of the branding integration. Up to two service workflow integrations will be made by the Accela team as a training exercise for both the branding and data integration. The API keys and URLs will be made in the ACA global settings section, “Third Party Data Integrations” and OpenForms settings to allow the data integration. Login/Logout settings will be made with copies of the necessary scripts.

Integration Training – Training the core components of the Accela Citizen Access integrations features.

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A
ccela Data and Branding Integration Training – Accela will provide one (1) hour remote training session to the Agency Accela administration team on how to administer the integration features of the Premium Citizen Experience powered by OpenCities. This will empower the Agency to create their migration checklist to move their Accela non -production configuration to Accela production when they are ready to publish the OpenCities platform content.
• Enabling the Branding integration
• Service page workflow integrations
• Import of sample Landing, General/Embed, and Service Pages o One Landing page for 3 Accela Solutions – Building, Planning, Fire o General/Embed pages for Manage my Records and Search Records o Two services pages for 3 Accela Solutions for two Civic Application record types – Building, Planning, Fire
o Creation of any additional pages and design of those pages are the responsibility of the agency.
• Sharing of sample forms for Accela Civic Applications related to the data integration for two record types to be copied into Agency OpenForms instance
o Creation of any additional forms and design of those forms are the responsibility of the agency.
• Enabling the data integration
• Logon/logout setup

ADMINISTRATION

PROJECT TIMELINE
The project is estimated to take 3 months. The project will start after the client's SaaS upgrade is complete.

PROJECT COMPLETION
Upon completion of the work defined above, this contract will be closed.

A
ccela will not (i) exceed the total estimate amount without the prior approval of Customer and/or (ii) continue to provide Services, after the total estimate has been reached, without the prior authorization of Customer. Should there be changes to the scope, timeline or resources that increases the hours or costs needed to complete the Project, a Change Order may be required prior to project continuation.

PROJECTS PUT ON HOLD
It is understood that sometimes Agency priorities are revised requiring the Agency to place the Accela implementation on hold. The Agency must send a formal written request sent to Accela to put the project DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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on hold. Delays of 2 weeks or more that have a tangible impact to Accela’s resource plan are subject to change order.

If an Agency -based delay puts the project on hold for more than 90 da ys, Accela reserves the right to terminate the contract and negotiate new terms. If an Agency -based delay puts the project on hold past the termination period, Accela reserves the right to terminate the contract at the time of the delay. After that time, Accela can choose to cancel the rest of the Statement of Work. To finish the project will require a new Statement of Work at new pricing.

PAYMENT TERMS
Accela will perform the Services on a T&M payment basis. Payments will be based on: (i) the nature and scope of the Services outlined, (ii) the expected staffing requirements, (iii) the Project Schedule, (iv) Accela’s and Customer’s roles and responsibilities, and (v) the other assumptions as set forth in this SOW.

The price is based on the information available at the time of signing and the assumptions, dependencies and constraints, and roles and responsibilities of the Parties, as stated in this SOW.

Description Detail Hours Rate Cost Discounted
Price
Design,
Configuration, &
Training
• Branding and Data Premium
Citizen Experience
configuration
• Accela Integration training
and consultation
80 $250.00 $20,000.00 $0.00
Total $0.00

EXPENSES
There is no provision for travel expenses or travel time in this SOW because Agency does not need any onsite resources. Travel to the Agency will not be conducted unless a Change Order, inclusive of travel expense terms and conditions, is signed prior to travel commencing to cover the cost of the travel.

CONTRACT SUM
The total amount payable under this SOW, as calculated for the above-mentioned fees is $0.00 The project is expected to take 80 hours. The Hourly Rate is $250 per hour discounted to $0. The total estimated amount payable under this SOW, as calculated from the above-mentioned fees, is $0. This estimated price is based on the information available at time of signing and the assumptions, dependencies and constraints, and roles and responsibilities of the Parties, as stated in this SOW.

CHANGE ORDERS
In order to make a change to the scope of Professional Services in this SOW, and subject to the Disclaimers below, Agency must submit a written request to Accela specifying the proposed changes in detail. Accela will submit to Agency an estimate of the charges and the anticipated changes in the delivery schedule that will result from the proposed chan ge in the Professional Services Change Order. Accela will continue performing the Professional Services in accordance with the SOW until the parties agree in writing on the DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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change in scope of work, scheduling, and fees therefore. Any Change Order will be agreed to by the parties in writing prior to implementation of the Change Order. If Accela’s effort changes due to changes in timing, roles, responsibilities, assumptions, scope, etc. or if additional support hours are required, a change order will be created that details these changes, and impact to project and cost (if any). Any change order will be signed by Accela and Agency prior to commencing any activities defined in the change order. Standard blended rate for Accela resources is $250 per hour.

EXPIRATION
The scope and terms of this SOW must be executed as part of the Order executed between Accela and Agency on or before 10/31/2023. If the SOW is not executed within that timeframe, the current scope and terms can be renegotiated.

DISCLAIMERS
Accela makes no warranties in respect of its Services described in this SOW except as set out in the Consulting Services Policy . Any configuration of or modification to the Product that can be consistently supported by Accela via APIs, does not require direct database changes and is capable of being tested and maintained by Accela will be considered a “Supported Modification”. Accela’s obligations and warranties in respect of its Services, Products, and maintenance and support, as set out the agreement between Accela and Agency, does not extend outside the Supported Modifications or to any Agency manipulation of implemented scripts, reports, interfaces and adaptors.

I
n the event Agency requires significant work beyond the scope of the included configuration and onboarding services, Accela may request that Agency separately engages Accela’s Professional Services organization to complete the out-of-scope services. In such instance, a separate proposal and statement of work for the additional services will be drawn up and agreed between the parties.

ASSUMPTIONS

GENERAL SCOPE ASSUMPTIONS
• Any coding or integrations not specifically described in this document are not in scope. • Development of test scripts are not in scope of Accela Services. • Development of custom training materials are not in scope of Accela Services.

NOT IN SCOPE
• Scripting – EMSE, batch, or pageflow
• Configuration of custom fields and custom lists
• Configuration of document groups/types
• Configuration of pageflows
• Reporting
• O
nline payments
• Support ticket or Case Management
• Data Conversions
• Custom Application Development
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• Interface Development to other 3rd party applications • Content migration
• Information Architecture of website structure

ACCELA TECHNICAL ASSUMPTIONS
• The Customer will have to be deployed to Accela SaaS before the Premium Citizen Experience can be applied to their solution.
• The Customer will have to have their OpenCities theme published before the Premium Citizen Experience can be applied to their solution.
• Agency will select/purchase/acquire the appropriate third-party software prior to the Project Start Date. In the event third party software is not available and provisioned by Project Start Date, a change order may be needed to cover delays in project work. • Agency is live with Accela Citizen Access and is taking application submittals. • If an Agency has a custom wrapper or is using Brand Builder that those will be replaced with the Accela Premium Citizen Experience powered by OpenCities .
• T
he implementation is done remotely.
• There is no content migration from the previous website, CMS, or forms product(s).

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SIGNATURES
This Statement of Work is agreed to by Accela and Agency and made effective upon the date of last signature. If undated by Agency, the effective date will be as of the Accela signature hereto.

AC
CELA, INC. City of Palo Alto, CA
Authorized Signature Authorized Signature
Name - Type or Print Name - Type or Print
Title Title
Date Date
DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Chief Legal Officer
9/5/2023
Aaron Haggarty
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Fixed Price Statement of Work Page 1 of 9
Proprietary and Confidential
St
atement of Work
Palo Alto, CA
S
trategic Assessment
8/2/2023
V
ersion 1.0
A
ccela, Inc.
2633 Camino Ramon
Suite 120
San Ramon, CA 94583
Tel: 925-659-3200
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TABLE OF CONTENTS
TABLE OF CONTENTS ..................................................................................................................................................................... 2 DOCUMENT CONTROL .................................................................................................................................................................... 3 INTRODUCTION ................................................................................................................................................................................ 4 OVERVIEW ............................................................................................................................................................................................ 4 SCOPE OF SERVICES ...................................................................................................................................................................... 4 WORK DESCRIPTION ............................................................................................................................................................................. 4 OUT OF SCOPE ................................................................................................................................................................................. 6 PROJECT ASSUMPTIONS ............................................................................................................................................................... 6 GENERAL PROJECT ASSUMPTIONS .................................................................................................................................................. 6 PROJECT TIMELINE ......................................................................................................................................................................... 6 PROJECT COMPLETION ........................................................................................................................ ERROR! BOOKMARK NOT DEFINED.

PROJECTS PUT ON HOLD .............................................................................................................. ERROR! BOOKMARK NOT DEFINED.

PAYMENT TERMS ................................................................................................................. ERROR! BOOKMARK NOT DEFINED.

PAYMENT SCHEDULE ..................................................................................................................... ERROR! BOOKMARK NOT DEFINED.

EXPENSES ....................................................................................................................................... ERROR! BOOKMARK NOT DEFINED.

CONTRACT SUM................................................................................................................................... ERROR! BOOKMARK NOT DEFINED.

ADMINISTRATION ................................................................................................................. ERROR! BOOKMARK NOT DEFINED.

CHANGE ORDERS ........................................................................................................................... ERROR! BOOKMARK NOT DEFINED.

EXPIRATION ..................................................................................................................................... ERROR! BOOKMARK NOT DEFINED.

DISCLAIMERS....................................................................................................................................... ERROR! BOOKMARK NOT DEFINED.

SIGNATURES .................................................................................................................................................................................... 8 APPENDIX A: CHANGE ORDER FORM........................................................................................................................................... 9 SIGNATURE AND ACCEPTANCE ............................................................................................................................................................... 9 DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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DOCUMENT CONTROL
Date Author Version Change Reference
08/02/2023 B Jacobs 1.0 SOW Created
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INTRODUCTION

OVERVIEW
This Statement of Work (“SOW”) dated as of the last date of signature below sets forth the scope and definition of the project-based professional services (collectively, the “Services”) to be provided by Accela, Inc. and Palo Alto, CA (“Agency” or “Customer”).

T
his SOW is governed by the Accela Consulting Services Policy found at www.accela.com/terms.

N
otwithstanding anything to the contrary, Accela is not a ssigning or licensing any intellectual property to Customer under this SOW.

SCOPE OF SERVICES
This document captures the configuration analysis Palo Alto, CA has and and provides visibility into how Accela will perform an assessment of your solution.
• Intake (including Citizen Access portal)
• Plan Review
• Fees and Permit Issuance
• Inspections
• Automation Scripting Optimization
• Standardization of Process and Workflow
• Data Cleansing
• Back-Office User Personalization
• Data Standardization
• Integration Optimization
• Reports
• Mobile Usage

WORK DESCRIPTION
The Success team would start by requesting a quick 30-minute call with the customer that is leading the Success Visit to make sure we all understand the process, needs, and agency background.

W
hile we are getting this meeting in place below is a brief outline of the types of meetings we normally have with agencies. These are generalized and we can add more time or reduce the number of meetings based on your feedback. Please use the below as a guide to help me understand who and how many meetings we should have. When thinking about how to break up the teams, it is best to break up inspectors and back-office SME’s since they normally interact with different parts of the product.

Th
e Success Team will then deliver a findings and recommendations document that can be leveraged to develop a plan to address the issues identified.

Business Stakeholders (Division Heads this can be one or multiple meetings) 1 – 1 ½ hour meeting
Goals – Stakeholders
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Introduce the Assessment Program initiative concept to the business leadership.

Gain the business’ perspective on the system’s history, performance, and health.

Focusing specifically on:

Existing business challenges, causes, and impacts.
5-year future vision and needs for the system.

Discover and document key concerns and business drivers that may need to be considered in the SaaS business case, proposal, and high-level project plan.

It is critical these sessions are attended by leadership who can speak to the tangible business impacts in terms of revenue capture, citizen optics, executive optics, etc. *** **these are not technical meetings. Often this will require Director-level or above. ***
Accela Deliverables
Lead meetings with each business leadership stakeholder; virtual or in person0 Provide experienced Accela leadership to attend to ensure customary business card matching.

Agency Responsibilities
Identify and schedule key business leadership stakeholders.

Identify agency representative(s) to attend meetings and participate as desired.

IT Department
1 - 2-hour meeting
Technical Discovery
Goals
Technical Q and A and additional knowledge transfer with agency and Accela Analyze the key technical areas of the existing system, including but not limited to:

Interfaces
Reports
Custom Scripts
Batch jobs
Technical Discovery activities may be modified based upon lessons learned and agency priorities
Accela Deliverables
Lead the requests-for-information and technical breakout sessions Summary of remediation that would be required
Agency Responsibilities
Identify and schedule attendees

SME’s / users (Permitting, Zoning, Code Enforcement, etc). 2 hour meeting
Subject Matter Expert Discovery
Goals
Recap pain points that were discovered during the business leadership sessions. Gain SME deeper dive perspective.

Discover any additional SME pain points and perspectives to inform business case. Focusing on both infrastructure and application-level perspectives for the back office, citizen facing, and mobile applications.

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A
ccela Deliverables
Accela lead meeting with each SME or group; onsite
A
gency Responsibilities
Identify SMEs who possess knowledge of critical workflows and processes and can provide software demonstrations of functionality as needed A
ccela will come onsite for up to 2 days to execute this project.

OUT OF SCOPE
• Upgrades
• Configuration
• Development

PROJECT ASSUMPTIONS

GENERAL PROJECT ASSUMPTIONS
• When the project team works onsite at an Agency facility, suitable workspace will be provided and equipped with appropriately functional and network access to and connectivity with all systems, networks, and data as necessary to perform the project. Agency will also provide necessary security badges, parking passes as required.
• Agency will provide the necessary tools, accounts, and permissions that will enable Accela to access the Agency’s internal network for remote installation and testing. This access must be provided through industry standard tools such as Virtual Private Network (VPN). • Make available the appropriate key Agency users for the review. • Provide timely and appropriate responses to Accela’s requests for information

PROJECT TIMELINE
The project is estimated to take 4 weeks. The projected start date for the Project is forty-five (45) calendar days after mutual acceptance and signature of this SOW.

PROJECTS PUT ON HOLD AND AGENCY DELAYS
It is understood that sometimes Agency priorities are revised requiring the Agency to place the Accela implementation on hold. The Agency must send a formal written request to Accela to put the project on hold. Delays of two (2) weeks or more that have a tangible impact to Accela’s resource plan are subject to change order.

I
f an Agency -based delay puts the project on hold for more than 90 days, Accela reserves the right to terminate the contract and negotiate new terms. If an Agency- based delay puts the project on hold past the termination period, Accela reserves the right to terminate the contract at the time of the delay. After that time, Accela can choose to cancel the rest of the Statement of Work. To finish the project will require a new Statement of Work at new pricing at the standard rates.

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Fixed Price Statement of Work Page 7 of 9
Proprietary and Confidential
When a Project is put on hold, at minimum, Accela will need to draft a Change Order to keep some of the Accela project manager’s time engaged to monitor progress and to resource the project once it comes off hold. Other Change Order items may be needed as a result of the delay. When a project goes on hold, project resources will be re-deployed and Accela will need a forty-five (45) calendar day notice to re-staff the project. Accela cannot guarantee a Project Start Date until Accela resources are confirmed.

S
hould the Agency become non -responsive to Accela communications for a term of 30 calendar days regarding continuance of the project work, Accela can choose to cancel the remainder of the Statement of Work. To finish the project will require a new Statement of Work at new pricing at the standard rates.

PAYMENT TERMS
Accela will perform the Services on a monthly progress payment basis. The Fixed-Fee price is based on the information available at the time of signing and the assumptions, dependencies and constraints, and roles and responsibilities of the Parties, as stated in this SOW. Invoices will be sent out monthly.

Monthly Progress Payments Price
Contract Signing $0
Month 1 $0
TOTAL SERVICES COST $0
P
ayments are due net 30 of the invoice date.

EXPENSES
The overall fee listed in the Payment Terms section is inclusive of expenses. The Agency will not be billed for travel expenses or travel time. The Agency will not receive expense reports or receipts.

CONTRACT SUM
The total amount payable under this SOW, is $0, including expenses.

Th
e estimated fees for this SOW are predicated on the timely completion of Project milestones. However, should completion of milestones slip due to actions or inactions of Agency, and should this slippage result in material effort to Accela in excess of the hours provided for in this document, Accela will produce a Change Order for additional hours in support of the scope and deliverables contained herein. Any change order will need to be approved by both Agency and Accela. Change orders will need to be approved within three (3) business days of delivery to avoid a halt of work on the Project.

CHANGE ORDERS
In order to make a change to the scope of the Services in this SOW, and subject to the Disclaimers below, Agency must submit a written request to Accela specifying the proposed changes in detail. Accela will submit to Agency an estimate of the charges and the anticipated changes in the delivery schedule that will result from the proposed change in the Change Order, based on the standard rate for Accela resources of $250 per hour. Accela will continue performing the Services in accordance with the SOW until the parties agree in writing on the change in scope of work, scheduling, and fee s. If Accela’s effort changes, such as DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F Item 7
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changes to the baseline schedule, roles, responsibilities, assumptions, or scope, or if additional support hours are required, a change order will be created that details these changes and impact to project and cost (if any). Any change order must be agreed to by Accela and Agency prior to commencing any activities defined in the change order.

EXPIRATION
The scope and terms of this SOW must be executed by 9/30/2023. If the SOW is not executed within that timeframe, the current scope and terms can be renegotiated.

DISCLAIMERS
Accela makes no warranties in respect of its Services described in this SOW except as set out in the Agreement. Any configuration of or modification to the Product that can be consistently supp orted by Accela via APIs, does not require direct database changes and is capable of being tested and maintained by Accela will be considered a “Supported Modification”. Accela’s obligations and warranties in respect of its Services, Products, and maintenance and support, as set out the agreement between Accela and Agency, does not extend outside the Supported Modifications or to any Agency manipulation of implemented scripts, reports, integrations and adaptors.

I
n the event Agency requires significant wo rk beyond the scope of the included configuration and onboarding services, Accela may request that Agency separately engages Accela’s Services organization to complete the out-of-scope services. In such instance, a separate proposal and statement of work for the additional services will be drawn up and agreed between the parties.

SI

GNATURES
This Statement of Work is agreed to by the parties and made effective upon the date of last signature. If undated by Agency, the effective date will be as of the Accela signature hereto.

AC
CELA, INC. Palo Alto, CA
Authorized Signature Authorized Signature
Name - Type or Print Name - Type or Print
Title Title
Date Date
DocuSign Envelope ID: 7F3BAFEB-5DDD-424E-8620-FCEFF658F24F 9/5/2023
Chief Legal Officer
Aaron Haggarty
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APPENDIX A: CHANGE ORDER FORM
Agency: CO #:

Project Code: Date:

Contract ID:

Initiating Department:

Initiated By:

A. PROJECT CHANGE DESCRIPTION/TASK SUMMARY:

1. [Description of Change #1 – Issue details/scope impact, add as many as needed] • Schedule impact:
• Resource impact:
• Cost impact:

2. Etc.

Tota
l Project Schedule Impact: [Enter]
Total Project Resource Impact: [Enter]
Total Project Cost Impact: [Enter]
B. BI
LLING TERMS:

Please describe the method by which Accela may bill the customer. Typically for CO’s this is T&M.

C. E
XPIRATION:

If this is a CO for a bucket of T&M hours there needs to be an expiration date

SIGNATURE AND ACCEPTANCE
The above Services will be performed in accordance with this Change Order/Work Authorization and the provisions of the Contract for the purchase, modification, and maintenance of the Accela systems. The approval of this Change Order will act as a Work Auth orization for Accela and/or Agency to perform work in accordance with this Change Order, including any new payment terms identified in this Change Order. This Change Order takes precedent and supersedes all other documents and discussions regarding this subject matter.

Accepted By: Accepted By:

Accela, Inc.

By: By:

Print Name: Print Name:

Title: Title:

Date: Date:

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: October 2, 2023
Report #:2309-2020
TITLE
SECOND READING: Adoption of Ordinances Rezoning the Properties Located at 340-404 Portage Avenue, 200-404 Portage Avenue/3040-3200 Park Boulevard, 3201-3225 Ash Street, 3250 Park Boulevard, and 278 Lambert Avenue from RM-30 to Planned Community (PC); and Adoption of an Ordinance Approving a Development Agreement with SI 45, LLC for the 14.65-Acre Property Located at 200-404 Portage Avenue, 3040-3250 Park Boulevard, 3201-3225 Ash Street, and 278 Lambert Avenue. CEQA Status – EIR certified by Council Resolution 10123 (SCH #2021120444)

RECOMMENDATION
Staff recommends that the City Council adopt the attached Ordinances on second reading.

EXECUTIVE SUMMARY
Introduced on September 5, 2023 and continued to September 12, 2023, the City Council reviewed and adopted the subject draft ordinances on first reading. One of the ordinances amends the zoning of a 14.65-acre site within the North Ventura Neighborhood. The site, comprised of 3040-3250 Park, 200-404 Portage, 3201-3225 Ash Street, and 278 Lambert, is to be redeveloped in accordance with the five (5) new Planned Community Zone Districts the ordinance establishes. The City Council’s motion also included the adoption of a draft Ordinance amending a Development Agreement between the City of Palo Alto and Sobrato Organization for the entirety of the 14.65-site; further details are provided in the September 5, 2023 staff report1 (CMR 2301-0807). The motion below passed with a 7-0 vote.

Motion: Mayor Kou moved, seconded by Councilmember Burt to:

1. Adopt the Environmental Impact Report and the Resolution in Attachment B making findings of overriding consideration and adopting the Mitigation Monitoring and Reporting Plan in Attachment G; and
1 Link to staff report to Council of September 5, 2023:
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2. Adopt the Resolution Amending the Comprehensive Plan and Comprehensive Plan Land Use Map: and

3. Adopt the five Planned Community Ordinances for each of the resulting parcels, amending the zone district across the project site; and

4. Adopt the Record of Land use Action, including Architectural Review findings for approval of the Development Plan, findings for a Vesting Tentative Map with exceptions and Conditions of Approval of the proposed project; and

5. Adopt the Ordinance approving the Development Agreement; and

6. In-lieu art funds generated under this agreement would be directed to art located on the former Cannery site, subject to consistency with the code; and

7. Direct staff to initiate a process to rename Portage Avenue to Thomas Foon Chew Avenue and refer to the Parks and Recreation Commission naming of the new park.

This report conveys the ordinances that were presented to Council in the first reading without modifications, consistent with the motion.

In accordance with Palo Alto Municipal Code 2.26.060, the matter of future in-lieu art funds associated with the townhome portion set forth in the proposed Development Agreement will be placed on a future City Council meeting agenda to discuss the expenditure of those funds.

In accordance with Palo Alto Municipal Code 21.20.140, the City Council must approve street names. For subdivisions, street names must be approved by Council prior to the recordation of a final map. The process for the naming of streets is set forth in Council Resolution No. 5739, approved on October 1, 1979. The City Manager or his designee refers the naming to the Palo Alto Historical Association, who submits street name(s) to the Communications staff for review to ensure there are no conflicts. Due to Council’s direction, staff will initiate the public process for the renaming of Portage Avenue.

FISCAL/RESOURCE IMPACT
This action to approve these legislative documents previously reviewed on second reading has no fiscal impact.

ENVIRONMENTAL REVIEW
The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. The City, acting as the lead agency, circulated a Draft Environmental Impact Report (EIR) for the 200 Portage Avenue Townhome project on September 16, 2022. The 45-day comment period was extended to 60-days in response to public comment and ended on November 15, 2022. The Development Agreement and associated actions is analyzed as Alternative 3 in the EIR. The City released a Revised Final EIR on June 2, 2023. The Council in its approval of the proposed Development Agreement on September 12, 2023 adopted Resolution 10123 certifying the EIR, making findings of overriding Item 8
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consideration for the proposed project, and adopting the Mitigation Monitoring and Reporting Program.

ATTACHMENTS
Attachment A: Ordinance Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 340-404 Portage Avenue from Multiple Family Residential (RM-30) to PC Planned Community Zone Attachment B: Ordinance Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 200-404 Portage Avenue/3040- 3200 Park Boulevard from Multiple Family Residential (RM-30) to PC Planned Community Zone Attachment C: Ordinance Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 3201-3225 Ash Street from Multiple Family Residential (RM-30) to PC Planned Community Zone Attachment D: Ordinance Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 3250 Park Boulevard from Multiple Family Residential (RM-30) to PC Planned Community Zone Attachment E: Ordinance Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 278 Lambert Avenue from Multiple Family Residential (RM-30) to PC Planned Community Zone Attachment F: Ordinance Approving a Development Agreement with SI 45, LLC, for the 14.65- acre Property Located at 200-404 Portage Avenue, 3040-3250 Park Boulevard, 3201-3225 Ash Street, and 278 Lambert Avenue
APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 8
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CANNERY *NOT YET APPROVED*
0160112_20230920_ay16 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 340-404 Portage Avenue from Multiple Family Residential (RM-30) to PC Planned Community Zone (PC-______) for the Partial Demolition and Historic Restoration/Rehabilitation of the Cannery Building for Research and Development Use

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre- screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for the 14.65 acre property at 200 -404 Portage Avenue, 3040 -3250 Park Boulevard, 3201-3225 Ash Street, and 278 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The Tentative Map associated with the Project, including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately

3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed uses on the other four (4) newly created parcels require Planned Community (PC) Zoning. (d) The Architectural Review associated with the Project, including conditions of approval, approved by Record of Land Use Action No. _______ include information on the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The approved Tentative Map and the Architectural Review shall be known collectively as the “Project Plans” and incorporated herein by reference. (f) This Ordinance is one of fi ve (5) PC Planned Community Ordinances associated with the Project, and sets forth the permitted uses, required development standards, and required public benefits applicable solely and exclusively for 340 -404 Portage Avenue (the “Subject Property”) as depicted and legally described on Exhibit A.

Item 8
Attachment A - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 340-
404 Portage Avenue from
Multiple Family
Residential (RM-30) to PC
Planned Community Zone

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CANNERY *NOT YET APPROVED*
0160112_20230920_ay16 2
(g) After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC-______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After a study sessions on December 15, 2022, January 19, 2022, and a public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The PTC, after a duly noticed public hearing held on July 12 and July 26, 2023, considered the Environmental Impact Report (“EIR”), then reviewed the Project Plans and this Ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions included in the Planned Community zone related to allo wable land uses and required development standards, and subject to provision of the public benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review.
(l) The Palo Alto City Council, after due consideration of th e proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project and this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section ( 6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehens ive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) as set forth in Record of Land Use Action No. _____, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

Item 8
Attachment A - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 340-
404 Portage Avenue from
Multiple Family
Residential (RM-30) to PC
Planned Community Zone

Item 8: Staff Report
Pg.
5 Packet Pg. 448 of 638

CANNERY *NOT YET APPROVED*
0160112_20230920_ay16 3
SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of Subject Property from Multiple Family Residential (RM -30) to “PC Planned Community Zone _____”.

SECTION 3. Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a) Construction of a one-level parking garage;
(b) Demolition of approximately 84,000 square feet of the existing cannery building restoration, rehabilitation and maintenance of the remaining cannery building in accor dance with the Development Agreement and Architectural Review. (c) Construction of an approximately 2,600 square foot retail/interpretive display space within the remaining cannery building and an adjacent outdoor seating area (“Retail Area”) in accordance with the Development Agreement and Architectural Review.

SECTION 4. Land Uses
(a) The following land us es shall be permitted, subject to the limitations stated in Section 4(c):
(1) Research and Development as defined in Palo Alto Municipal Code section

18.04.030(a)(123) as of the Effective Date of this Ordinance and set forth in full below:
“Research and development” means a use engaged in the study, testing, engineering, product design, analysis and development of devices, products, processes, or services related to current or new technologies. Research and development may include limited manufacturing, fabricating, processing, assembling or storage of prototypes, devices, compounds, products or materials, or similar related activities, where such activities are incidental to research, development or evaluation. Examples of “research and development” uses include, but are not limited to, computer software and hardware firms, computer peripherals and related products, electronic research firms, biotechnical and biomedical firms, instrument analysis, genomics, robotics and pharmaceutical research laboratories, and related educational development.

Research and development may include the storage or use of hazardous materials in excess of the exempt quantities listed in Title 15 of the Municipal Code, or etiological (biological) agents up to and including Risk Group 3 or Bio Safety Level 3 classifications as defined by the National Institute of Health (NIH) Item 8
Attachment A - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 340-
404 Portage Avenue from
Multiple Family
Residential (RM-30) to PC
Planned Community Zone

Item 8: Staff Report
Pg.
6 Packet Pg. 449 of 638

CANNERY *NOT YET APPROVED*
0160112_20230920_ay16 4
or the Center for Disease Control (CDC). Higher classification levels of etiological (biological) agents are not allowed without express permission of the City Manager, Fire Chief, and Police Chief.

Related administrative uses such as finance, legal, human resources, management, marketing, sales, accounting, purchasing, or corporate offices; provisions of services to others on or off-site; and related educational uses may also be included provided they remain primarily supportive of the primary uses of “research and development” and are part of the same research and development firm.
(2) Retail service or Retail-like uses, except Hotels, Theaters, Commercial nurseries, Auto dealerships, and liquor stores.
(3) Multiple-family residential.
(4) Public facilities, including display of interpretive materials regarding the history of the historic cannery building and use.
(b) The following land uses shall be conditionally permitted, subject to the limitations stated in Section 4(c):
(1) Retail service or Retail-like uses excluded in Section 4(a)(2). (c) Special limitations on land uses include the following:
(1) A maximum of 140,174 square feet may be devoted to Research and Development (excluding an approximately 10,000 square foot exterior, covered area on the southwest corner of the building (“Covered Area”), which is currently used as an entry and outdoor seating area, parking, and screened storage, as depicted in Exhibit B. The Covered Area may remain in such use by the existing tenant as of the date of this Ordinance. Following termination of tenancy by the existing tenant, the Covered Area shall be converted such that it no longer meets the City’s then-existing definition of “Floor Area.”).
(2) The Retail Area may be occupied by Retail or Retail-like uses per Section 4 (a) and (b), above, or Public Facility uses only and shall be subject to a recordable covenant governing public access to the historic interpretive materials provided onsite pursuant to the terms of the Development Agreement.

//

//
Item 8
Attachment A - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 340-
404 Portage Avenue from
Multiple Family
Residential (RM-30) to PC
Planned Community Zone

Item 8: Staff Report
Pg.
7 Packet Pg. 450 of 638

CANNERY *NOT YET APPROVED*
0160112_20230920_ay16 5
SECTION 5. Site Development Regulations and Development Schedule (a) Development Standards:

Development standards for the Subject Property shall be those as set forth in the Project Plans.
(b) Historic Maintenance Covenant:

As provided in the Development Agreement, t he Owner shall record a historic maintenance covenant, in a form acceptable to the City Attorney, to ensure maintenance of the Remaining Cannery in accordance with the Project Plans. (c) Parking and Loading Requirements:

The Owner shall provide parking and loading as set forth in the Project Plans. The parking requirements are adopted in consideration of a Transportation Demand Management (TDM) Plan, which is attached hereto and incorporated herein by reference. (d) Modifications to the Development Plan, Land Uses and Site Development Regulations:

Once the project has been constructed consistent with the approved Development Plan, any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan or the site development regulations contained in Section 5 (a) – (c) above shall require an amendment to this Planned Community zone, except as provided in the recorded Historic Maintenance Covenant and/or Project Plans . Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance. (e)
Development Schedule:

The project is required to include a Development Schedule pursuant to PAMC §18.38.100.

The approved Development Schedule is set forth in the Development Agreement.

SECTION 6. Public Benefits.
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The p ublic benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for Item 8
Attachment A - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 340-
404 Portage Avenue from
Multiple Family
Residential (RM-30) to PC
Planned Community Zone

Item 8: Staff Report
Pg.
8 Packet Pg. 451 of 638

CANNERY *NOT YET APPROVED*
0160112_20230920_ay16 6
compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

SECTION 7. Environmental Review
An EIR for the Project was prepared in accordance with the California Environmental Quality Act. The City Council adopted Resolution No. ____ certifying the adequacy of the EIR.

SECTION 8. Effective Date
This ordinance shall be effective on the thirty -first day after the date of its adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Planning and Development Services

Item 8
Attachment A - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 340-
404 Portage Avenue from
Multiple Family
Residential (RM-30) to PC
Planned Community Zone

Item 8: Staff Report
Pg.
9 Packet Pg. 452 of 638

CANNERY *NOT YET APPROVED*
0160112_20230920_ay16 7
Exhibit A: Subject Property Plat and Legal Description
Exhibit B: Covered Area
Item 8
Attachment A - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 340-
404 Portage Avenue from
Multiple Family
Residential (RM-30) to PC
Planned Community Zone

Item 8: Staff Report
Pg.
10 Packet Pg. 453 of 638

TOWNHOMES *NOT YET APPROVED*
0160113_20230920_ay16 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 200-404 Portage/3040-3200 Park Boulevard from Multiple Family Residential (RM-30) to PC Planned Community Zone (PC-______) for the Partial Demolition of the Cannery Building and Construction of Multifamily Residential Units.

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre- screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for the 14.65 acre property at 200-404 Portage Avenue, 3040-3250 Park Boulevard, 3201-3225 Ash Street, and 278 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The Tentative Map and Final Map associated with the Project, including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately 3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed uses on the other four (4) newly created parcels require Planned Community (PC) Zoning.
(d) The Architectural Review associated with the Project, including conditions of approval, approved by Record of Land Use Action No. _______ include information on the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The approved Tentative Map and the Architectural Review shall be known collectively as the “Project Plans” and are incorporated herein by reference. (f) This Ordinance is one of five (5) PC Planned Community Ordinances associated with the Project, and sets forth the permitted uses, required development standards, and Item 8
Attachment B - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code The
Zoning Map to Change
the Classification of
Property Located at 200-
404 Portage Avenue
3040-3200 Park
Boulevard from Multiple
Family Residential RM-30
to PC Planned Community
Zone

Item 8: Staff Report
Pg.
11 Packet Pg. 454 of 638

TOWNHOMES *NOT YET APPROVED*
0160113_20230920_ay16 2
required public benefits applicable solely and exclusively for 200-404 Portage/3040-3200 Park Boulevard (the “Subject Property”) as depicted and legally described on Exhibit A. (g) After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC-______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After a study sessions on December 15, 2022, January 19, 2022, and a public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The PTC, after a duly noticed public hearing held on July 12 and July 26, 2023, considered the Environmental Impact Report (“EIR”), then reviewed the Project Plans and this Ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions included in the Planned Community zone related to allowable land uses and required development standards, and subject to provision of the public benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review.
(l) The Palo Alto City Council, after due consideration of the proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project and this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section (6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Item 8
Attachment B - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code The
Zoning Map to Change
the Classification of
Property Located at 200-
404 Portage Avenue
3040-3200 Park
Boulevard from Multiple
Family Residential RM-30
to PC Planned Community
Zone

Item 8: Staff Report
Pg.
12 Packet Pg. 455 of 638

TOWNHOMES *NOT YET APPROVED*
0160113_20230920_ay16 3
Subject Property) as set forth in Record of Land Use Action No. ____, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of Subject Property from Multiple Family Residential (RM-30) to “PC Planned Community Zone _____”.

SECTION 3. Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a) Demolition of a portion of the existing cannery building, as described in more detail in the Development Agreement, to facilitate the construction of 74 market-rate townhome units.

SECTION 4. Land Uses
(a) The following land uses shall be permitted:
(1) Multiple family residential.
(2) Accessory Facilities and uses customarily incidental to permitted uses (3) Home Occupations, when accessory to permitted residential uses. (4) Horticulture, Gardening, and Growing of food products for consumption by occupants of a site
SECTION 5. Site Development Regulations and Development Schedule (a) Development Standards:

Development standards for the Subject Property shall be those conforming to the Townhome Buildings set forth in the Project Plans.
(b) Parking and Loading Requirements:

The Owner shall provide parking and loading as set forth in the Project Plans. (c) Modifications to the Development Plan, Land Uses and Site Development Regulations:

Item 8
Attachment B - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code The
Zoning Map to Change
the Classification of
Property Located at 200-
404 Portage Avenue
3040-3200 Park
Boulevard from Multiple
Family Residential RM-30
to PC Planned Community
Zone

Item 8: Staff Report
Pg.
13 Packet Pg. 456 of 638

TOWNHOMES *NOT YET APPROVED*
0160113_20230920_ay16 4
Once the project has been constructed consistent with the approved Development Plan, any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan or the site development regulations contained in Section 5 (a) – (b) above shall require an amendment to this Planned Community zone. Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance. (d) Development Schedule:

The project is required to include a Development Schedule pursuant to PAMC §18.38.100.

The approved Development Schedule is set forth in the Development Agreement.

SECTION 6. Public Benefits.
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The public benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

SECTION 7. Environmental Review
An EIR for the Project was prepared in accordance with the California Environmental Quality Act. The City Council adopted Resolution No. _______ certifying the adequacy of the EIR.

//

//

//

Item 8
Attachment B - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code The
Zoning Map to Change
the Classification of
Property Located at 200-
404 Portage Avenue
3040-3200 Park
Boulevard from Multiple
Family Residential RM-30
to PC Planned Community
Zone

Item 8: Staff Report
Pg.
14 Packet Pg. 457 of 638

TOWNHOMES *NOT YET APPROVED*
0160113_20230920_ay16 5
SECTION 8. Effective Date
This ordinance shall be effective on the thirty-first day after the date of its adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Planning and
Development Services

Item 8
Attachment B - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code The
Zoning Map to Change
the Classification of
Property Located at 200-
404 Portage Avenue
3040-3200 Park
Boulevard from Multiple
Family Residential RM-30
to PC Planned Community
Zone

Item 8: Staff Report
Pg.
15 Packet Pg. 458 of 638

TOWNHOMES *NOT YET APPROVED*
0160113_20230920_ay16 6
Exhibit A: Subject Property Plat and Legal Description

Item 8
Attachment B - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code The
Zoning Map to Change
the Classification of
Property Located at 200-
404 Portage Avenue
3040-3200 Park
Boulevard from Multiple
Family Residential RM-30
to PC Planned Community
Zone

Item 8: Staff Report
Pg.
16 Packet Pg. 459 of 638

ASH BUILDING *NOT YET APPROVED*
0160114_20230920_ay16 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 3201-3225 Ash Street from Multiple Family Residential (RM- 30) to PC Planned Community Zone (PC-______) for the Maintenance of an Existing Office Building in Association with a Development Agreement.

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre- screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for the 14.65 acre property at 200-404 Portage Avenue, 3040-3250 Park Boulevard, 3201-3225 Ash Street, and 278 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The Tentative Map and Final Map associated with the Project, including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately 3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed uses on the other four (4) newly created parcels require Planned Community (PC) Zoning.
(d) The Architectural Review associated with the Project, including conditions of approval, approved by Record of Land Use Action No. _______ includes information on the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The approved Tentative Map and the Architectural Review shall be known collectively as the “Project Plans” and are incorporated herein by reference. (f) This Ordinance is one of five (5) PC Planned Community Ordinances associated with the Project, and sets forth the permitted uses, required development standards, and required public benefits applicable solely and exclusively for 3201-3225 Ash Street (the “Subject Property”) as depicted and legally described on Exhibit A.

Item 8
Attachment C - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3201-
3225 Ash Street from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
17 Packet Pg. 460 of 638

ASH BUILDING *NOT YET APPROVED*
0160114_20230920_ay16 2
(g) After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC-______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After a study sessions on December 15, 2022, January 19, 2022, and a public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The PTC, after a duly noticed public hearing held on July 12 and July 26, 2023, considered the Environmental Impact Report (“EIR”), then reviewed the Project Plans and this Ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions included in the Planned Community zone related to allowable land uses and required development standards, and subject to provision of the public benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review.
(l) The Palo Alto City Council, after due consideration of the proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project and this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section (6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) as set forth in Record of Land Use Action No. _______, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

Item 8
Attachment C - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3201-
3225 Ash Street from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
18 Packet Pg. 461 of 638

ASH BUILDING *NOT YET APPROVED*
0160114_20230920_ay16 3
SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of Subject Property from Multiple Family Residential (RM-30) to “PC Planned Community Zone _____”.

SECTION 3. Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a) Retention of the existing building at 3201-3225 Ash Street.

SECTION 4. Land Uses
(a) The following land uses shall be permitted, subject to the limitations stated in Section 4(c):
(1) Those uses permitted in the Research, Office and Limited Manufacturing (ROLM) District on the effective date of this ordinance, except manufacturing uses, subject to the regulations contained in Title 18 of the Palo Alto Municipal Code.
(2) Multiple-family residential.
(b) The following land uses shall be conditionally permitted:
(1) Those uses conditionally permitted in ROLM District on the effective date of this ordinance.
(c) Special limitations on land uses include the following:
(1) A maximum of 4,707 square feet of the existing building may be devoted to uses permitted or conditionally permitted in the ROLM District, expressly including general office uses.

SECTION 5. Site Development Regulations and Development Schedule (a) Development Standards:

Development standards for the Subject Property shall be those conforming to the 4,707 square foot building 3201-3225 Ash Street existing as of the effective date of this ordinance, except that the development standards for a multiple-family residential use shall be those applicable to the RM-30 zone district.

Item 8
Attachment C - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3201-
3225 Ash Street from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
19 Packet Pg. 462 of 638

ASH BUILDING *NOT YET APPROVED*
0160114_20230920_ay16 4
(b) Parking and Loading Requirements:

The Owner shall provide parking and loading as required by the Project Plans. The parking requirements are adopted in consideration of a Transportation Demand Management (TDM) Plan, which is incorporated herein by reference and a recorded off-site parking covenant will be required with the City as a third-party beneficiary.
(c) Modifications to the Development Plan, Land Uses and Site Development Regulations:

The Development Plan does not contemplate any new construction on the Subject Property except as provided the Project Plans. Any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan or the site development regulations contained in Section 5 (a) – (b) above shall require an amendment to this Planned Community zone. Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance. (d) Development Schedule:

The Project is required to include a Development Schedule pursuant to PAMC §18.38.100.

The approved Development Schedule is set forth in the Development Agreement.

SECTION 6. Public Benefits and Monitoring
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The public benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

//

//
Item 8
Attachment C - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3201-
3225 Ash Street from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
20 Packet Pg. 463 of 638

ASH BUILDING *NOT YET APPROVED*
0160114_20230920_ay16 5
SECTION 7. Environmental Review
An EIR for the Project was prepared in accordance with the California Environmental Quality Act. The City Council adopted Resolution No. ____ certifying the adequacy of the EIR.

SECTION 8. Effective Date
This ordinance shall be effective on the thirty-first day after the date of its adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Planning and
Development Services

Item 8
Attachment C - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3201-
3225 Ash Street from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
21 Packet Pg. 464 of 638

ASH BUILDING *NOT YET APPROVED*
0160114_20230920_ay16 6
Exhibit A: Subject Property Plat and Legal Description

Item 8
Attachment C - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3201-
3225 Ash Street from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
22 Packet Pg. 465 of 638

PARK BUILDING *NOT YET APPROVED*
0160115_20230920_ay16 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 3250 Park Boulevard from Multiple Family Residential (RM- 30) to PC Planned Community Zone (PC-______) for the Maintenance of an Existing Commercial Building in Association with a Development Agreement.

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre- screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for the 14.65 acre property at 200-404 Portage Avenue, 3040-3250 Park Boulevard, 3201-3225 Ash Street, and 278 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The Tentative Map and Final Map associated with the Project, including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately 3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed uses on the other four (4) newly created parcels require Planned Community (PC) Zoning.
(d) The Architectural Review associated with the Project, including conditions of approval, approved by Record of Land Use Action No. _______ includes information on the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The approved Tentative Map and the Architectural Review shall be known collectively as the “Project Plans” and incorporated herein by reference. (f) This Ordinance is one of five (5) PC Planned Community Ordinances associated with the Project, and sets forth the permitted uses, required development standards, and required public benefits applicable solely and exclusively for 3250 Park Boulevard (the “Subject Property”) as depicted and legally described on Exhibit A.

Item 8
Attachment D - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3250
Park Boulevard from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
23 Packet Pg. 466 of 638

PARK BUILDING *NOT YET APPROVED*
0160115_20230920_ay16 2
(g) After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC-______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After a study sessions on December 15, 2022, January 19, 2022, and a public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The PTC, after a duly noticed public hearing held July 12 and July 26, 2023, considered the Environmental Impact Report (“EIR”), then reviewed the Project Plans and this Ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions included in the Planned Community zone related to allowable land uses and required development standards, and subject to provision of the public benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review. (l) The Palo Alto City Council, after due consideration of the proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project and this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section (6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) as set forth in Record of Land Use Action No. ________, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

Item 8
Attachment D - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3250
Park Boulevard from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
24 Packet Pg. 467 of 638

PARK BUILDING *NOT YET APPROVED*
0160115_20230920_ay16 3
SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of Subject Property from Multiple Family Residential (RM-30) to “PC Planned Community Zone _____”.

SECTION 3. Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a) Conversion of approximately 11,762 square feet of an existing building at 3250 Park Boulevard to Research and Development uses.

SECTION 4. Land Uses
(a) The following land uses shall be permitted, subject to the limitations stated in Section 4(b):
(1) Automotive Services.
(2) Research and Development.
(3) Multiple-Family Residential.
(4) Accessory facilities and activities customarily associated with or essential to permitted uses, and operated incidental to the principal use. (b) Special limitations on land uses include the following:
(1) A maximum of 11,762 square feet within the existing building may be devoted to uses Automotive Services or Research and Development uses, including any accessory uses.

SECTION 5. Site Development Regulations and Development Schedule (a) Development Standards:

Development standards for the Subject Property shall be those conforming to the 11,762 square foot building at 3250 Park Boulevard existing as of the effective date of this ordinance. (b) Parking and Loading Requirements:

The Owner shall provide off-street parking and loading as set forth in the Project Plans.

The parking requirements are adopted in consideration of a Transportation Demand Management (TDM) Plan, which is attached hereto and incorporated herein by reference.

Item 8
Attachment D - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3250
Park Boulevard from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
25 Packet Pg. 468 of 638

PARK BUILDING *NOT YET APPROVED*
0160115_20230920_ay16 4
(c) Modifications to the Development Plan, Land Uses and Site Development Regulations:

The Development Plan does not contemplate any new construction on the Subject Property. Any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan or the site development regulations contained in Section 5 (a) – (b) above shall require an amendment to this Planned Community zone. Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance.
(d) Development Schedule:

The project is required to include a Development Schedule pursuant to PAMC §18.38.100.

The approved Development Schedule is set forth in the Development Agreement.

SECTION 6. Public Benefits.
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The public benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

SECTION 7. Environmental Review
An EIR for the Project was prepared in accordance with the California Environmental Quality Act. The City Council adopted Resolution No. ____ certifying the adequacy of the EIR.

//

//
Item 8
Attachment D - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3250
Park Boulevard from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
26 Packet Pg. 469 of 638

PARK BUILDING *NOT YET APPROVED*
0160115_20230920_ay16 5
SECTION 8. Effective Date
This ordinance shall be effective on the thirty-first day after the date of its adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Planning and
Development Services

Item 8
Attachment D - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3250
Park Boulevard from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
27 Packet Pg. 470 of 638

PARK BUILDING *NOT YET APPROVED*
0160115_20230920_ay16 6
Exhibit A: Subject Property Plat and Legal Description

Item 8
Attachment D - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 3250
Park Boulevard from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
28 Packet Pg. 471 of 638

BMR/PARK DEDICATION *NOT YET APPROVED*
0160116_20230920_ay16 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 278 Lambert from Multiple Family Residential (RM-30) to PC Planned Community Zone (PC-______) for the Provision of a Park and Construction of Affordable Housing in Association with a Development Agreement.

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre- screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for the 14.65 acre property at 200 -404 Portage Avenue, 3040 -3250 Park Boulevard, 3201-3225 Ash Street, and 278 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only ; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The Tentative Map and Final Map associated with the Project, including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately 3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed uses on the other four (4) newly created parcels require Planned Community (PC) Zoning.
(d) The Architectural Review associated with the Project, including conditions of approval, approved b y Record of Land Use Action No. _______ includes information on the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The approved Tentative Map and the Architectural Review shall be known collectively as the “Project Plans” and are incorporated herein by reference. (f) This Ordinance is one of five (5) PC Planned Community Ordinances associated with the Project, and sets forth the permitted uses, required development standards, and Item 8
Attachment E - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 278
Lambert Avenue from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
29 Packet Pg. 472 of 638

BMR/PARK DEDICATION *NOT YET APPROVED*
0160116_20230920_ay16 2
required public benefits applicable solely and exclusively for 27 8 Lambert (the “Subject Property”), depicted and legally described on Exhibit A. (g) After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC-______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After a study sessions on December 15, 2022, January 19, 2022, and a public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The PTC, after a duly noticed public hearing held on J uly 12 and July 26, 2023, considered the Environmental Impact Repor t (“EIR”), then reviewed the Project Plans and this Ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions inc luded in the Planned Community zone related to allowable land uses and required development standards, and subject to provision of the public benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review. (l) The Palo Alto City Council, after due consideration of the proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project a nd this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section ( 6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) as set forth the Record of Land Use Action No. _____, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

Item 8
Attachment E - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 278
Lambert Avenue from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
30 Packet Pg. 473 of 638

BMR/PARK DEDICATION *NOT YET APPROVED*
0160116_20230920_ay16 3
SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of Subject Property from Multiple Family Residential (RM -30) to “PC Planned Community Zone _____”.

SECTION 3. Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a) Dedication of approximately 3.25 acres of land to the City for use as public park and for the development of affordable housing.

SECTION 4. Land Uses
(a) The following land uses shall be permitted
(1) Public Facilities
(2) Multiple-Family Residential
SECTION 5. Site Development Regulations and Development Schedule (a) Development Standards:

Approximately one acre of the Subject Property shall be utilized as the site for an affordable housing project; approximately 2.25 acres of the Subject Property shall be utilized as the site for a public park. The development standards for these uses shall be in conformance with such plans that are approved by the City Council for the Subject Property. (b) Modifications to the Development Plan, Land Uses and Site Development Regulations:

Once the project has been constructed consistent with the approved Development Plan, any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan shall require an amendment to this Planned Community zone in accordance with Palo Alto Municipal Code Chapter 18.38. Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance. (c) Development Schedule:

The development schedule for the Subject Property shall be in accordance with future approvals for specific development plans.

Item 8
Attachment E - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 278
Lambert Avenue from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
31 Packet Pg. 474 of 638

BMR/PARK DEDICATION *NOT YET APPROVED*
0160116_20230920_ay16 4
SECTION 6. Public Benefits.
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The public benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

SECTION 7. Environmental Review
An EIR for the Project was prepared in accordance with the California Environmental Quality Act. The City Council adopted Resolution No. ____ certifying the adequacy of the EIR.

//

//

//

//

//

//

//

//

//
Item 8
Attachment E - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 278
Lambert Avenue from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
32 Packet Pg. 475 of 638

BMR/PARK DEDICATION *NOT YET APPROVED*
0160116_20230920_ay16 5
SECTION 8. Effective Date
This ordinance shall be effective on the thirty -first day after the date of its adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Planning and
Development Services

Item 8
Attachment E - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 278
Lambert Avenue from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
33 Packet Pg. 476 of 638

BMR/PARK DEDICATION *NOT YET APPROVED*
0160116_20230920_ay16 6
Exhibit A: Subject Property Plat and Legal Description

Item 8
Attachment E - Ordinance
Amending Section

18.08.040 of the Palo Alto
Municipal Code (The
Zoning Map) to Change
the Classification of
Property Located at 278
Lambert Avenue from
Multiple Family
Residential RM-30 to PC
Planned Community Zone

Item 8: Staff Report
Pg.
34 Packet Pg. 477 of 638

Not yet adopted
1 0160111_20230920_ay16
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Approving a Development Agreement with SI 45, LLC, for the 14.65-acre Property at 200-404 Portage Avenue, 3040-3250 Park Boulevard, 3201-3225 Ash Street, and 278 Lambert Avenue

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1
. Findings and Determinations

A. In order to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic costs of development, the Legislature of the State of California enacted Sections 65864 et seq. of the Government Code, which authorizes the City and any person holding a legal or equitable interest in the subject real property to enter into a development agreement, establishing certain development rights in the property, which is the subject of the development project application.

B. SI 45, LLC (“Applicant” or “Owner”) has a legal interest in certain real property located in the City consisting of approximately 14.65 acres and commonly known as 200 -404 Portage Avenue, 3201-3225 Ash Street, 3040 -3250 Park Boulevard and 278 Lambert Street in Palo Alto, California (collectively, the “Property”).

C. At the conclusion of a City Council ad hoc committee process, Owner applied in the Fall of 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for Property.

D. The Project proposes to redevelop the Property by:
(i) Removing approximately 84,000 sf of the cannery building located at 200 -404 Portage Avenue to accommodate development of 74 townhomes. (ii) Restoring and rehabilitat ing the remaining portion of the c annery, retaining the same area of existing R&D uses in the c annery, and including the Retail/Display and Outdoor Seating Area;
(iii) Constructing a two -level parking garage to facilitate dedication of an approximately 3.25-acre parcel to the City;
(iv) Merging and re subdividing the Property into five parcels to facilitate the Project and dedication of the approximately 3.25-acre parcel;
(v) Retaining the existing office uses of the existing 3201-3225 Ash Street building; (vi) Retaining and conver ting the e xisting 3250 Park Boulevard b uilding from the current automotive uses to R&D use; and
(vii) Developing 74 Townhomes.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
35 Packet Pg. 478 of 638

Not yet adopted
2 0160111_20230920_ay16
E. The purpose of Government Code Sections 65864 to 65869.5 is to authorize municipalities, in their discretion, to establish certain development rights in real property for a period of years regardless of intervening changes in land use regulations. As authorized by Government Code Section 65865(c) , the City has adopted Resolution No. 7104, establishing procedures and requirements for c onsideration of development agreements in Palo Alto. This Development Agreement has been processed, considered, and executed in accordance with such procedures and requirements.

F. Notice of intention to consider this Development Agreement has been given pursuant to Government Code section 65867.

G. The City's Planning and Transportation Commission and City Council have given notice of intention to consider this Development Agreement, have conducted public hearings thereon pursuant to Government Code section 65867 and City's Resolution No. 7104, and the City Council has found that the provisions of this Development Agreement are consistent with City's Comprehensive Plan, as amended.

H. The City has prepared an EIR for the Project and, through Resolution N o. _______, certified the EIR, adopted a mitigation monitoring and reporting program, and made a statement of overriding considerations prior to the execution of this Agreement.

SECTION 2
. The City Council hereby approves the Development Agreement between the City of Palo Alto and SI 45, LLC, a copy of which is attached hereto in substantially final form as Exhibit "A," and authorizes the Mayor to execute the Agreement on behalf of the City.

SECTION 3
. The City Clerk is directed to cause a copy of the development agreement to be recorded with the County Recorder not later than ten (10) days after it becomes effective.

SECTION 4. The City Council adopts this ordinance in accordance with the California Environmental Quality Act ("CEQA") findings adopted by Resolution No _______.

//

//

//

//

//

//

//
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
36 Packet Pg. 479 of 638

Not yet adopted
3 0160111_20230920_ay16
SECTION 5. This ordinance shall be effective upon the thirty -first (31st) day after its adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSTENTIONS:

NOT PARTICIPATING:

ABSENT:

ATTEST: APPROVED:

__________________________ __________________________ City Clerk Mayor

__________________________ __________________________ Assistant City Attorney City Manager

__________________________
Director of Planning and
Development Services

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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This document is recorded
for the benefit of the City
of Palo Alto and is entitled
to be recorded free of charge
in accordance with Section 6103
of the Government Code.

After Recordation, mail to:

OFFICE OF THE CITY ATTORNEY
City of Palo Alto
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, Ca 94303
SPACE ABOVE THIS LINE FOR RECORDER’S USE

DEVELOPMENT AGREEMENT
By and Between
CITY OF PALO ALTO, A Chartered City
and
SI 45, LLC,
A Delaware Limited Liability Company
3200 P
ortage Avenue
Effective Date: _________________________

EXHIBIT A
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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Table of Contents
Page
ARTICLE I — DEFINITIONS .......................................................................................................3

1.1 Definitions .......................................................................................................................3 ARTICLE II - PROPERTY SUBJECT TO THE DEVELOPMENT AGREEMENT; BINDING EFFECT; NEGATION OF AGENCY ...............................................................8

2.1 Property Subject to the Development Agreement ...........................................................8

2.2 Binding Effect ..................................................................................................................8

2.3 Negation of Agency .........................................................................................................8 ARTICLE III — TERM; FORCE MAJEURE; CANCELLATION ...............................................8

3.1 Basic Term .......................................................................................................................8

3.2 Force Majeure ..................................................................................................................8

3.3 Extension of Term Due to Moratoria ...............................................................................8

3.4 Cancellation by Mutual Consent ......................................................................................9 ARTICLE IV — DEVELOPMENT OF THE PROPERTY............................................................9

4.1 Vested Development Rights ............................................................................................9

4.2 Subsequent Approvals .....................................................................................................9

4.3 Sequence of Development .............................................................................................10

4.4 Permitted Uses ...............................................................................................................11 ARTICLE V — OWNER PROMISES..........................................................................................11

5.1 Construction of the Parking Garage and R&D Relocation ............................................11

5.2 Demolition of Portion of Cannery and Completion of Retail/Display and Outdoor Seating Area ...................................................................................................................11

5.3 Recordation of Final Map and Dedication of BMR/Parkland Dedication Parcel ..........13

5.4 Environmental Conditions .............................................................................................14

5.5 Switch Building .............................................................................................................14

5.6 Development of Townhomes and Park Building ...........................................................14

5.7 Transportation Demand Management Program .............................................................15

5.8 Payment of Fees .............................................................................................................15 ARTICLE VI — CITY PROMISES..............................................................................................16

6.1 Processing of Subsequent Approvals .............................................................................16

6.2 Acceptance of BMR/Parkland Dedication Parcel ..........................................................16 ARTICLE VII - EXCEPTIONS AND EXCLUSIONS .................................................................17

7.1 Subsequent Applicable Rules ........................................................................................17

7.2 Supervening Rules of Other Governmental Agencies ...................................................17

7.3 Building Codes ..............................................................................................................18

7.4 Utility Services ..............................................................................................................18

7.5 No General Limitation of Future Exercise of Power .....................................................18

7.6 Alternative Approvals ....................................................................................................18 Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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ARTICLE VIII - ANNUAL REVIEW ..........................................................................................18

8.1 Annual Review ..............................................................................................................18 ARTICLE IX - DEFAULT, REMEDIES, TERMINATION ........................................................19

9.1 Remedies for Breach ......................................................................................................19

9.2 Notice of Breach ............................................................................................................19

9.3 Applicable Law ..............................................................................................................20 ARTICLE X —- AMENDMENTS ...............................................................................................20

10.1 Modification Because of Conflict with State or Federal Laws ......................................20

10.2 Amendment by Mutual Consent ....................................................................................20

10.3 City Costs for Review ....................................................................................................20

10.4 Minor Amendments .......................................................................................................20

10.5 Amendment of Approvals ..............................................................................................21 ARTICLE XI — COOPERATION AND IMPLEMENTATION .................................................22

11.1 Cooperation ....................................................................................................................22

11.2 City Processing ..............................................................................................................22

11.3 Other Governmental Permits .........................................................................................22 ARTICLE XII — TRANSFERS AND ASSIGNMENTS .............................................................22

12.1 Transfers and Assignments ............................................................................................22

12.2 Covenants Run with the Land ........................................................................................23 ARTICLE XIII — MORTGAGE PROTECTION; CERTAIN RIGHTS OF CURE....................23

13.1 Mortgage Protection ......................................................................................................23

13.2 Mortgagee Not Obligated ..............................................................................................23

13.3 Notice of Default to Mortgagee .....................................................................................24 ARTICLE XIV — GENERAL PROVISIONS .............................................................................24

14.1 Project is a Private Undertaking ....................................................................................24

14.2 Notices, Demands, and Communications between the Parties ......................................24

14.3 Severability ....................................................................................................................25

14.4 Section Headings ...........................................................................................................25

14.5 Entire Agreement ...........................................................................................................25

14.6 Estoppel Certificate ........................................................................................................25

14.7 Statement of Intention ....................................................................................................25

14.8 Indemnification and Hold Harmless ..............................................................................26

14.9 Recordation ....................................................................................................................26

14.10 No Waiver of Police Powers or Rights ..........................................................................26

14.11 City Representations and Warranties .............................................................................26

14.12 Owner Representations and Warranties .........................................................................27

14.13 Counterparts ...................................................................................................................27

14.14 Waivers ..........................................................................................................................27

14.15 Time is of the Essence ...................................................................................................28

14.16 Venue .............................................................................................................................28

14.17 Surviving Provisions ......................................................................................................28 Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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14.18 Construction of Agreement ............................................................................................28

EXHIBIT A – Legal Description
EXHIBIT B – Plat
EXHIBIT C - Schedule and Parties’ Remedies for Default or Breach EXHIBIT D – [Form of] Assignment and Assumption Agreement Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
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41 Packet Pg. 484 of 638

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DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF PALO ALTO AND SI 45, LLC
THIS DEVELOPMENT AGREEMENT (hereinafter “ Agreement”) is entered into as of [date], by and between the CITY OF PALO ALTO, a chartered city of the State of California (“City”), and SI 45, LLC, a Delaware limited liability company ( “Owner”). City and Owner a re each a “Party” and collectively, the “Parties.”

RECITALS
THIS DEVELOPMENT AGREEMENT is entered into on the basis of the following facts, understandings and intentions of the parties:

A. In order to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic costs of development, the Legislature of the State of California enacted Sections 65864 et seq. of the Government Code, which authorizes the City and any person holding a legal or equitable interest in the subject real property to enter into a development agreement, establishing certain development rights in the property, which is the subject of the development project application.

B. Pursuant to Government Code Section 65865, the City has adopted Resolution No. 7104, establishing procedures and requirements for consideration of development agreements in Palo Alto. This Development Agreement has been processed, considered, and executed in accordance with such procedures and requirements.

C. Owner has a legal interest in certain real property located in the City consisting of approximately 14.65 acres and commonly known as 200- 404 Portage Avenue, 3201- 3225 Ash Street, 3040-3250 Park Boulevard and 278 Lambert Street in Palo Alto, California (collective ly, the “Property”), which Property is described in the attached Exhibit A , and shown on the map attached as Exhibit B.

D. City and Owner through a City Council-appointed ad hoc subcommittee conducted good faith and collaborative negotiations regarding the c urrent and future uses of the Property, including a dispute regarding legal non- conforming uses of the property ( “LNCU Dispute”) and Owner’s pending application for a 91- unit residential project, including 15% moderate for sale affordable units, on a portion of the Property pursuant to certain state housing laws, including SB 330 (“SB 330 Residential Project ”). As a means of resolving the LNCU Dispute and as a more holistic alternative to the SB 330 Residential Project, City and Owner entered into a Tollin g and Process Agreement (“TPA Agreement”), dated July 31, 2022, for consideration of this Agreement and related Approvals by City officials. The recitals of the TPA Agreement contain a more full contextual chronology.

E. City desires to grant Owner vested development rights to construct and operate the Project in a manner consistent with this Agreement. In exchange for these development rights, Owner agrees the LNCU Dispute is resolved, to proceed with the Project in lieu of the SB 330 Residential Project and to provide certain public benefits, including, but not limited to, (i) transfer of approximately 3.25 acres of land to the City for affordable housing and park uses, (ii) construct a one level over grade structured parking garage to allow relocation of the existing surface parking Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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on the dedication property, (iii) renovate/rehabilitate the remaining portion of the historic cannery building, including an approximately 2,600 square foot retail space to facilitate public appreciation of the interior historic elements of the cannery building and an adjacent outdoor landscaped seating area, (iv) implement a Transportation Demand Management ( “TDM”) program for the existing R&D and office uses to reduce single occupant trips by 15%, (v) payment of $5 Million fee to the City to support affordable housing and open space at the City’s discretion, and (vi) payment of all other applicable fees per the City’s municipal code as specified herein.

F. Concurrently with approval of this Development Agreement, the City has taken several actions to review and plan for the future development of the Project, including all required noticing and review and recommendation by the Architectural Review Board, Historic Review Board and Transportation and Planning Commission, and duly noticed public hearings by the City Council. These actions include the following, collectively the “Existing Approvals”:
a. Environmental Impact Report: The environmental impacts of the Project, including associated Approvals, have properly been reviewed and evaluated by the City pursuant to the California Environmental Quality Act, Public Resources Code Sections 21000 et seq. ( “CEQA”). Pursuant to CEQA, the City Council certified the Environmental Impact Report (“EIR”) for housing development at 200 Portage, which includes analysis of the Project as a project alternative, and adopted a Statement of Overriding Considerations by Resolution No. XXXX, adopted on [date]. As required by CEQA, the City adopted written findings and a mitigation monitoring and reporting program (“MMRP”).
b. Comprehensive Plan Amendment: Resolution No. XXXX on [date], making a text amendment to the “Mixed Use” designation and amending the land use designations for the Property to “Mixed Use,” in a manner consistent with the Project (“Comp Plan Amendment”)
c. Rezoning Ordinances : Ordinance Nos. XXXX [Cannery Parcel ], XXXX [Park Building Parcel], XXXX [Townhome Parcel], XXXX [Ash Building Parcel], and XXXX [Dedication Parcel] on [date], rezoning the future parcels on the Property to individual Planned Community zones in a manner consistent with the Project (“Rezoning Ordinances”).
d. Architectural Review/Development Plan: Ordinance Nos. XXXX [Cannery Parcel] and XXXX [Townhome Parcel] and Record of Land Use Action No XXXX on [date] approving of the Parking Garage and Historic Restoration and Rehabilitation of the Remaining Cannery ( “Cannery Architectural Review Approval ”) and Townhomes (“Townhomes Architectural Review Approval”).
e. Tentative Map: Record of Land Use Action No. XXXX on [date] to merge and resubdivide the Property into five parcels for the Remaining Cannery, the Townhomes, including a 74-unit condominium subdivision, the Ash Building, the Park Building, and the BMR/Parkland Dedication Parcel (“Tentative Map”).

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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f. TDM Program: Record of Land Use Action No. XXXX on [date] includes approval of a TDM Program for the Project, consistent with Section 5.7 this Agreement (“TDM Plan”).
g. The City is desirous of encouraging the creation of quality housing at all economic levels, thereby advancing the interests of its citizens, taken as a whole. The City has determined that the Project, with the associated approvals complies with the plans and policies set forth in the City’ s Comprehensive Plan and zoning regulations, as amended.
h. A primary purpose of this Development Agreement is to assure that the Project can proceed without disruption caused by a change in the City’ s planning policies and requirements following the Approvals and to ensure that the community benefits Owner committing to provide in connection with development of the Project are timely delivered. Owner also desires the flexibility to develop the Project in response to the market, which remains uncertain due to the COVID -19 pandemic, and to ensure that the Approvals remain valid over the projected development period.
i. These Recital s use certain terms with initial capital letters that are defined in Section 1 of this Agreement. City and Owner intend to refer to those definitions when the capitalized terms are used in these Recitals.
j. These recitals are intended in part to paraphrase and summarize this Agreement; however, the Agreement is expressed below with particularity and the Parties intend that their rights and obligations be determined by those provisions and not by the Recitals.
k. Following duly noticed public hearings , this Development Agreement was reviewed by the Planning Commission and recommended for approval by City Council on July 26, 2023 and, thereafter, approved by the City Council of the City by Ordinance No. [_____________], which was introduced on September 5, 2023, and finally adopted on [____________], and became effective thirty (30) days thereafter, and was duly executed by the parties as of [___________] (the “Effective Date”).

NOW, THEREFORE, the parties agree as follows:

AGREEMENT
ARTICLE I — DEFINITIONS
Definitions
In this Agreement, unless the context otherwise requires:
“Agreement” is defined in the Preamble.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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“Annual Review” is defined in Section 8.1.
“Applicable Rules” means the City ordinances, resolutions, rules, regulations and official policies in effect on the Effective Date, as amended by the Existing Approvals. “Approvals” means all Existing Approvals and Subsequent Approvals, as those terms are defined herein.
“Architectural Review Approval ” means the approval of an application for architectural review or approval of a development plan in connection with a Planned Community Zone application under the Applicable Rules.
“Ash Building” means the existing 4,707 sf building located at 3201-3225 Ash Street. “BMR/Park Dedication Parcel” means the approximately 3.25 acres of land to be offered for dedication and dedicated to the City pursuant to applicable provisions of this Agreement, currently expected to be developed, at City’s sole cost and discretion, as affordable housing (on an approximately one (1) acre portion thereof) and parkland (on an approximately 2.25 acre portion thereof) in the approximate location shown on the Tentative Map. “Cannery” means the existing historic cannery building at 200- 380 Portage Avenue/3200 Park Boulevard.
“Cannery Architectural Review Approval” is defined in Recital F. “CEQA” is defined in Recital F.
“City” means the City of Palo Alto, a chartered city of the State of California. “City Party” is defined in Section 14.8.
“Claims” is defined in Section 14.8.
“Commencement of Townhome Construction” means the issuance of building permits to construct the Townhomes. This does not include permits that are exclusively for site preparation. “Comp Plan Amendment” is defined in Recital F.
“Compliance Notice” is defined in Section 9.2(c)
“Comprehensive Plan” means the 2030 Palo Alto Comprehensive Plan, adopted in November 2017 and in effect as of the Effective Date, as amended by the Existing Approvals. “Days” means calendar days.
“Development Agreement” shall mean this Agreement.
“Development Impact Fees” means all fees now or in the future collected by the City from applicants for new development (including all forms of approvals and permits necessary for Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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development) for the funding of public services, infrastructure, improvements or facilities, but not including taxes or assessments, regulatory in-lieu fees such as the public art in-lieu fee, or fees for processing applications or permits or for design review. The fees included in this definition include, but are not limited to those fees set forth in Chapters 16.58 and 16.59 of the Municipal Code, fees for traffic improvements and mitigation, and fees for other community facilities or related purposes (but not including any school fees imposed by a school district); provided nothing herein shall preclude City from collecting fees lawfully imposed by another entity having jurisdiction which City is required or authorized to collect pursuant to State law. “Discretionary Action” includes a “Discretionary Approval” and is an action or decision which requires the exercise of judgment, deliberation, and which contemplates the imposition of revisions or conditions, by City, including the City Council or any board, commission or department and any officer or employee thereof, i n the process of approving or disapproving a particular activity, as distinguished from an activity which merely requires City, including the City Council or any board, commission or department and any officer or employee thereof, to determine whether there has been compliance with applicable statutes, ordinances, regulations, or Conditions of Approval.
“Effective Date” is defined in Recital K.
“EIR” is defined in Recital F.
“Existing Approvals” is defined in Recital F.
“Expiration Date” means the 10th anni versary of the Effective Date, except as extended pursuant to Section 3.3.
“Historic Covenant” is defined in Section 5.2.
“Final Map” is defined in Section 5.3.
“LNCU Dispute” is defined in Recital D.
“MMRP” is defined in Recital F.
“Mortgage” means and refers, singly and collectively, to any mortgages, deeds of trust, security agreements, assignments and other like security instruments encumbering all or any portion of the Property or any of Owner’s rights under this Agreement. “Mortgagee” means and refers to the holder of any Mortgage encumbering all or any portion of the Property or any of the Owner ’s rights under this Agreement, and any successor, assignee or transferee of any such Mortgage holder.
“Notice of Breach” is defined in Section 9.2(a).
“Operating Memorandum” is defined in Section 10.4(a).
“Owner” means SI 45, LLC, a Delaware limited liability company.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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“Park Building” means the existing approximately 11,762 sf building located at 3250 Park Boulevard (and formerly referred to as the “Audi” Building). “Parking Garage” means the new structured (one level above grade) parking garage shown on the Cannery Architectural Review Approval that will allow relocation of most of the existing surface parking for the Cannery as required by the Approvals. “Party” means a signatory to this Agreement, or a successor or assign of a signatory to this Agreement.
“Permitted Delay” is defined in Section 3.2.
“Planning Director ” means the Director of the City ’s Department of Planning and Development Services.
“Public Benefit Fee” means the monetary payment by Owner to the City for City ’s use towards parkland improvement and/or provision of affordable housing, in the City’s sole discretion as set forth in Section 5.8(b).
“Prevailing Wage Laws” is defined in Section 14.8.
“Project” means proposed redevelopment of the Property in accordance with the Applicable Rules, Approvals, and this Agreement, which is generally described as follows:
(i) Construction of the Parking Garage to facilitate dedication of the BMR/Parkland Dedication Parcel (including relocation of an existing above ground powerline); (ii) Restoration/rehabilitation of the Remaining Cannery, retaining the same area of existing R&D uses in the Cannery but relocated into the Remaining Cannery and including the Retail/Display and Outdoor Seating Area;
(iii) Removal of approximately 84,000 sf of the Cannery to accommodate development of the Townhomes;
(iv) Merger and resubdivision of the Property into five parcels (Remaining Cannery (Lot 3), Townhomes (Lot 1) including subdivision for condomini um purposes , Ash Building (Lot 4), Park Building (Lot 5) and BMR/Park Dedication Parcel (Lot 2) to facilitate the Project and dedication of the BMR/Park Dedication Parcel to the City for affordable housing and park purposes;
(v) Retention of the existing office uses of the Ash Building; (vi) Retention and conversion of the existing Park Building from the current automotive uses to R&D use; and
(vii) Development of the Townhomes.
“Property” is defined in Recital C.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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“Retail/Display and Outdoor Seating Area ” shall mean app roximately 2,600 sf of new ground floor retail in the Remaining Cannery with: (1) public view opportunities to the monitor roof portion/internal truss system of the Remaining Cannery, (2) an exhibit of historic information about the Cannery, and (3) outdoor landscaped seating area, all as further defined on the Cannery Architectural Review Approval and pursuant to Section 5.2. “Remaining Cannery” shall mean that portion of the Cannery remaining after approximately 84,000 square feet are demolished on the northeast end of the building, as shown on the Cannery Architectural Review Approval.
“Research and Development ” or “R&D” shall mean the land use defined in Palo Alto Municipal Code section 18.04.030(a)(123) as that section read on the Effective Date. “R&D Relocation” is defined in Section 4.3(a)
“Rezoning Ordinances” is defined in Recital F.
“SB 330 Residential Project” is defined in Recital D.
“Subsequent Applicable Rules” means the ordinances, resolutions, rules, regulations and official policies of City, as they may be adopted and effective after the Effective Date that do not conflict with the Applicable Rules, or that are expressly made applicable to the Project by this Agreement.
“Subsequent Approvals” is defined in Section 4.2.
“Switch Building” means those certain premises consisting of approximately 1,650 square feet of building space located at the end of the driveway adjacent to 270 Lambert Street, also known as 278 Lambert Street, currently leased to Comcast of California IX, Inc. “TDM” is defined in Recital E.
“TDM Plan” is defined in Recital F.
“Tentative Map” is defined in Recital F.
“Term” is defined in Section 3.1.
“Townhomes” means the 74 -market rate, for -sale townhome -style 3 - and 4- bedroom residential units and related infrastructure, landscaping and circulation proposed as part of the Project as shown on the Townhomes Architectural Review Approval. “Townhomes Architectural Review Approval” is defined in Recital F. “TPA Agreement” is defined in Recital D.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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ARTICLE II - PROPERTY SUBJECT TO THE DEVELOPMENT AGREEMENT; BINDING EFFECT; NEGATION OF AGENCY
Property Subject to the Development Agreement . All of the Property shall be subject to this Development Agreement. Owner agrees that all persons holding legal or equitable title in the Property shall be bound by this Development Agreement.

Binding Effect. Except as otherwise expressly provided herein, the burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, the Parties and their respective assigns, heirs, or successors in interest.

Negation of Agency. The Parties acknowledge that, in entering into and performing this Agreement, each Party is acting as an independent entity and not as an agent of the other in any respect. Nothing contained herein or in any document executed in connection herewith shall be construed as making City and Owner joint-venturers or partners.

ARTICLE III — TERM; FORCE MAJEURE; CANCELLATION
Basic Term. The term of this Agreement (the “Term”) shall commence as of the Effective Date and, unless earlier terminated in accordance with the terms hereof, shall continue in full force and effect until the Expiration Date. Upon the termination of this Agreement, no party shall have any further right or obligation hereunder except with respect to any outstanding obligation which was required to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement that has occurred prior to such termination or with respect to any obligations or rights that are specifically set forth as surviving this Agreement.

Force Majeure. Performance by either Party of an obligation hereunder shall be excused during any period of “ Permitted Delay.” Permitted Delay shall mean delay beyond the reasonable control of a Party including, without limitation, war; insurrection; strikes and labor disputes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; pandemics; epidemics; quarantine and public health restrictions; freight embargoes; legal challenges to this Agreement, legal challenges to the Project Approvals, or legal challenges to any other approval required from any public agency other than the City for the Project, or any initiatives or referenda regarding the same; environmental conditions, pre -existing or discovered, delaying the construction or development of the Property or any portion thereof; and moratorium as set forth in Section

3.3, so long as the Party claiming a Permitted Delay is acting diligently and in good faith. A Party’s financial inability to perform shall not be a ground for claiming a Permitted Delay. The Party claiming the Permitted Delay shall notify the other Party of its intent to claim a Permitted Delay, the specific grounds of the same and the anticipated period of the Permitted Delay within 10 business days after (i) the occurrence of the conditions which establish the grounds for the claim and (ii) the affected Party ’s actual knowledge of such occurrence. The period of Permitted Delay shall last no longer than the conditions preventing performance.

Extension of Term Due to Moratoria . In the event of any publicly declared moratorium that applies to the Project under the terms of this Agreement or other interruption in the issuance of permits, approvals, agreements to provide utilities or services or other rights or Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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entitlements by any State, or Federal governmental agency, or public utility which could postpone the construction of improvements at the Project, the term of this Development Agreement shall be extended without further act of the parties by a period equal to the duration of any such moratorium or interruption; provided, however, the total term extension under this Section 3.3 shall not exceed a total of two (2) years. Nothing in this Section is intended, however, to confer on City or any related agency any right to impose any such moratorium or interruption.

Cancellation by Mutual Consent . Except as otherwise permitted herein, this Development Agreement may be canceled in whole or in part only by the mutual consent of the City and Owner or their successors in interest, in accordance with the provisions of the City Code.

Any fees paid pursuant to this Development Agreement prior to the date of cancellation shall be retained by the City, and any sums then due and owing to the City shall be paid as part of the cancellation.

ARTICLE IV — DEVELOPMENT OF THE PROPERTY
Vested Development Rights. City hereby grants Owner the vested right to develop the Project for the Term of this Agreement in accordance with and subject to: (a) the terms and conditions of this Agreement and the Approvals and any amendments to any of them as shall, from time to time, be approved pursuant to this Agreement; and (b) the Applicable Rules (as defined in Section
1). Nothing contained herein shall restr ict the City’s discretion to approve, conditionally approve, or deny amendments or changes to the Approvals proposed by Owner. Except as is expressly provided otherwise in this Agreement, no future modifications of the following shall apply to the Project:
(a) the City Comprehensive Plan or a Coordinated Area Plan, (b) the Palo Alto Municipal Code,
(c) applicable laws and standards adopted by the City which purport to: (i) limit the use, subdivision, development density, design, parking ratio or plan, schedule of development of the Property or the Project in a manner inconsistent with this Agreement and the Approvals; or (ii) impose new dedications, improvements, other exactions, design features, or moratoria upon development, occupancy, or use of the Property or the Project; or (d) any other Applicable Rules.

Notwithstanding Section 18.77.090, and to the extent permitted by state law, including the Subdivision Map Act (Gov. Code §§ 66410 et seq.), the Existing Approvals and Subsequent Approvals shall be extended and shall not expire during the Term of this Agreement. In the event any Approval expires by operation of law during the term of this Agreement, City agrees that it will accept, process, and review in good faith and in a timely manner a new application that is consistent with the expired Approval, which application shall be governed by the Applicable Rules.

Subsequent Approvals.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
50 Packet Pg. 493 of 638

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Certain subsequent land use approvals, entitlements, and permits other than the Existing Approvals, will be necessary or desirable for implementation of the Project ( “Subsequent Approvals”). The Subsequent Approvals may include, without limitation, the following:
amendments of the Approvals, final map(s), demolition permits, grading permits, building permits, sewer and water connection permits, certificates of occupancy, and an y amendments to, or repealing of, any of the foregoing. The conditions, terms, restrictions, and requirements for such Subsequent Approvals shall be in accordance with the Applicable Rules (except as otherwise provided in Article VII) and shall not prevent development of the Property for the uses provided under the Approvals, the Applicable Rules, and this Agreement (“Permitted Uses”), or reduce the density and intensity of development, or limit the rate or timing of development set forth in this Agreement, as long as Owner is not in default under this Agreement.

Any subsequent discretionary action or discretionary approval initiated by Owner that is not otherwise permitted by or contemplated in the Approvals or which changes the uses, intensity, density, or building height or decreases the lot area, setbacks, parking or other entitlements permitted on the Property shall be subject to the rules, regulations, ordinances and official policies of the City then in effect and City reserves full and complete discretion with respect to any findings to be made in connection therewith.

Sequence of Development.

The Parties acknowledge and agree that, given the existing uses and leases of the Property, certain elements of the Project will need to be approved, developed and implemented in the following certain order:
(a) Construction of the Parking Garage (including the necessary relocation of an existing City of Palo Alto Utilities above -ground powerline) to allow the relocation of the existing surface parking serving the Cannery Building, Ash Building and Switch Building and (b) relocation of R&D space (for the relocation of existing R&D tenants or new R&D tenants) to the Remaining Cannery, including all necessary associated interior historic restoration and tenant improvements (to warm shell condition) to prepare for the demolition of a portion of the Cannery to accommodate the Townhomes ( “R&D Relocation”). It is noted t hat the construction of the Parking Garage will cause vibration so in the event the Parking Garage construction commences before or during the work on the Remaining Cannery, the Owner will comply with Mitigation Measure N-1, as provided in the MMRP.
(b) Demolition of the portion of the Cannery Building necessary to accommodate the Townhomes and ensure no buildings located on the future new property line and completion of the exterior and any remaining interior historic restoration, Retail/Display and Outside Seating Area.
(c) Recordation of final map(s) including dedication of the BMR/Park Dedication to the City, pursuant to Sections 5.3 and 6.2, and then; (d) Construction of the Townhomes (as dictated by the market); (e) Conversion of the Park Building to R&D uses may occur at any time, as dictated by the market, subject to the City’s remedies in Exhibit C and Section 9.1.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
51 Packet Pg. 494 of 638

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Permitted Uses.

The permitted uses of the Property during the Term of this Agreement shall be as follows and as may be further defined in the applicable Rezoning Ordinances:
(a) Research and Development uses shall be permitted for up to approximately 140,174 square feet of the Cannery on Lot 3, within the existing Cannery until redevelopment and within the Remaining Cannery after redevelopment consistent with the Approvals. (b) Approximately 2,600 square feet of the Remaining Cannery on Lot 3 shall be dedicated to the Retail Use/Display and Outdoor Seating Area consistent with Section 5.2. (c) Most uses permitted within the ROLM District (including office uses) shall be permitted for up to 4,707 square feet in the Ash Office Building on Lot 4. (d) Multiple family residential uses shall be permitted on Lot 1 in a manner consistent with the proposed Townhomes.
(e) Research and Development uses shall be permitted for up to 11,762 square feet at the Park Building on Lot 5 pursuant to Section 5.6.

ARTICLE V — OWNER PROMISES
Construction of the Parking Garage and R&D Relocation.

Within the deadlines set forth on Exhibit C, Owner will have submitted a good faith application and all applicable processing fees for the necessary ministerial permits (e.g., demolition, grading, building) to (a) relocate the existing City of Palo Alto Utilities above-ground powerline, (b) construct the Parking Garage and (c) complete the R&D Tenant Relocations within the Remaining Cannery consistent with the Approvals, including all applicable compliance with the Secretary of the Interior’s Standards for the Treatment of Historic Properties, and (d) demolish the applicable portion of the Cannery, all consistent with the Approvals.

After all necessary permits are issued, and wi thin the deadlines set forth on Exhibit C, Owner will have commenced and diligently complete, as concurrently as possible, (a) relocation of the existing City of Palo Alto Utilities above-ground powerline, (b) construction of the Parking Garage and (c) the R&D Relocation within the Remaining Cannery consistent with the Approvals, including all requirements of the Cannery Architectural Review Approval.

Until such time as the BMR/Park Dedication Parcel has been created and offered to the City pursuant to this Agreement, Owner will not voluntarily enter any new R&D Lease or additional extension of an Existing R&D Lease without including a clear acknowledge ment and acceptance by such tenant of this Development Agreement, including the City’ s remedies hereunder set forth in Section 9.1 and Exhibit C
.

Demolition of Portion of Cannery and Completion of Retail/Display and Outdoor Seating Area.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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Pg.
52 Packet Pg. 495 of 638

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After the R&D Relocations and Parking Garage are complete, within the deadlines set forth in Exhibit C, Owner will have commenced and diligently completed demolition of the applicable portion of the Cannery and completed all related internal and external historic restoration/rehabilitation and the Retail/Display and Outdoor Seating Area consistent with the Approvals, including issuance by the City of all necessary final inspections. For purposes of this section, “complete and operational ” shall mean that the City has issued final inspections or certificates of occupancy for the Parking Garage and final inspections and temporary certificates of occupancy for the R&D Relocation. Final certificates of occupancy for the R&D Relocation shall be issued after demolition and all related work under this Section

5.2 are complete.

Prior to final certificates of occupancy for the R&D Relocation, City and Owner will develop a recordable restrictive covenant ( “Historic Covenant ”) on the Remaining Cannery Building, including the Retail/Display and Outdoor Seating Area, for the benefit of the City, which will run with the land and be binding on successors and assigns of the Owner, in a form approved by the City Attorney, to ensure that the Remaining Cannery Building will be held, pledged, mortgaged and leased subject to and all of the following:
• Rehabilitation and maintenance of the essential elements of the Remaining Cannery as provided in the Cannery Architectural Review Approval and MMRP. • The use of the Retail/Display and Outdoor Seating Area as provided in Ordinance No. XXXX for the Remaining Cannery Parcel.
• Terms related to reasonable public opportunities to view the interior roof trusses during any tenant’s business hours (to be set by the tenant) in a manner that supports the tenant’s operations, including but not limited to reasonable accommodation for the hours appropriate for the nature of the tenant’s business, staffing, maintenance closures, reasonable number of private events, normal business requirements and events of force majeure typical to a commercial lease. The covenant will not contain any affirmative obligation to operate, provided, however, that while occupied by a tenant, the space shall be open to the public for a minimum of 100 hours per month averaged over a calendar year.
• A reasonab le process for the development, installation, modification and replacement of an interpretive historic display(s) both in the interior and/or exterior of the Retail/Display and Outdoor Seating Area consistent with the Cannery Architectural Review Approval to support and accommodate a commercial tenant’s operations, including reasonable times for review and response to support the tenant’s operations.
• Reasonable review and approval of minor modifications of the covenant by the Planning Director and identific ation of material modifications that require City Council approval.
• In the event the interior portion of the Retail/Display and Outdoor Seating Area is not subject to a lease and closed to public access for a period of six consecutive months following the initial certificate of occupancy, or sixty consecutive days Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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53 Packet Pg. 496 of 638

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from the last day of occupancy by a tenant, and there are no active lease negotiations nor reasonable expectation of entering a lease, the Owner will offer to the City a non-exclusive, revocable l icense to provide, at the City ’s sole cost and expense, opportunities for members of the public to enter the interior space. The license terms will include obligations for the City to staff and secure the space against damage, loss, and third-party claims. The license will also provide for termination with 30 days’ notice in the event the Owner engages in negotiations for a lease with a tenant. The license will not provide the City with any right to make any changes or improvements to the space (AS IS/WHERE IS condition). • Owner notice to the City following the termination of any tenancy. • In the event the interior portion of the Retail/Display and Outdoor Seating Area is not subject to a lease and closed to public access for a period of over two consecutive years (from either the initial certificate of occupancy or from the last day of occupancy by a tenant) and there is no active lease negotiations and no reasonable expectation of entering a lease, the Owner will offer to the City the option (at the City’s sole discretion) to enter a $1 dollar per year lease, on otherwise standard triple net lease terms with the City, for a period to be set by the City and Owner for the City to provide, at its sole cost and expense, opportunities for members of the public to enter the interior space. The lease terms will include obligations to staff and secure the space against damage, loss and third- party claims. The lease will not provide any right for the City to make any changes to the space without the prior written consent of the Owner, in Owner ’s sole and absolute discretion. The lease will include the length of the initial term and potential extension(s).

To ensure the Owner’s ability to meet any lease obligations, the City will not withhold temporary certificates of occupancy for the R&D Relocation so long as the Owner is cooperating in good faith to complete and record the Historic Covenant.

Recordation of Final Map and Dedication of BMR/Parkland Dedication Parcel.

Promptly after the Parking Garage and demolition a re both complete (removing the structure from the proposed new property line and relocating the surface parking) and within the deadlines set forth in Exhibit C
, Owner will promptly submit and process for recordation one or more final maps (each a “ Final Map”) that creates, at a minimum: (a) the Townhome Parcel; (b) the BMR/Parkland Dedication Parcel for acceptance by the City pursuant to the terms of this Agreement; and (c) all necessary easements for a multimodal connection from Portage Avenue to Park Boulevard, consistent with the City ’s Bicycle and Pedestrian Master Plan or the Approvals.

Conveyance to the City of the BMR/Parkland Dedication Parcel will be accomplished solely by means of City’s acceptance, as shown on the Final Map or subsequently thereto, of Owner’s offer of dedication as shown on the Final Map of the BMR/Parkland Dedication Parcel. In no event shall City require of Owner, nor be entitled to receive from Owner, dedication of the BMR/Parkland Dedication Parcel by means of a separate gran t deed or other separate instrument of conveyance.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
54 Packet Pg. 497 of 638

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Environmental Conditions.

Northgate Environmental’s Phase I report prepared for the City recommended limited Phase II testing on the BMR/Dedication Parcel. PES Environmental Inc. (“PES”), with the City’s review of their scope of work, completed the recommended limited Phase II testing entitled “Results of 2023 Additional Subsurface Investigation City Dedication Project – El Camino Center Adjacent to 200 – 320 Portage Avenue and 278 Lambert Avenue Palo Alto, California dated August __, 2023 (“PES Limited Phase II Report”), which was also reviewed by the City’s consultant. The PES Limited Phase II Report identified a single location (SB-39) with an isolated detection of total lead (390 mg/kg) at a depth of one foot below ground surface (bgs) as shown on Plate 3 (the “Lead Outlier”). To remediate this Lead Outlier, upon the City’s development of the park, Owner and the City shall share equally in the cost of any soil removal on APN 132- 38-043 to remove the Lead Outlier to a maximum depth of three feet and its replacement with clean soil. Upon the request of either Party, the Parties will meet and confer in good faith on other options to address this Lead Outlier at an earlier time to achieve a similar results.

In addition, Owner shall provide an updated Phase I report, prepared by a consultant selected by the City, within 6 months prior to the offer of dedication of the BMR/Park Dedication parcel to the City. Owner shall only be responsible for removing any new Hazardous Materials deposited on the BMR/Dedication Parcel to the residential environmental screening thresholds of the agency responsible for oversight of this Property to the City’s reasonable satisfaction. Owner shall not be responsible for any envi ronmental conditions already identified and known (or that should have been known) to the Parties prior to the Effective Date of this Agreement, or any changes in regulatory screening levels related to those already known conditions.

Switch Building.

To the extent feasible and desirable to the City, Owner shall facilitate assignment to the City of any existing lease of the Switch Building concurrent with acceptance of the BMR/Parkland Dedication Parcel by the City and a full release of Owner upon transfer. Owner shall have no obligation to modify any existing lease (other than to document an assignment to the City as the new fee owner) or incur any additional costs or liability related to the Switch Building for conveyance. Prior to conveyance to the City of the BMR/Parkland Dedication Parcel, Owner shall not voluntarily enter into or extend a lease of the Switch Building without first consulting the City.

Development of Townhomes and Park Building.

Following demolition of the portion of the Cannery, recordation of the final map that includes the Townhomes and offer of dedication of the BMR/Parkland Dedication Parcel to the City, and issuance of all applicable ministerial permits, and as otherwise dictated by the market, Owner (or Owner ’s assignee) may begin construction and complete the Townhomes consistent with the Approvals. Owner shall make good faith efforts to effectuate development of the Townhomes as soon as commercially practical. For each year, as part of Article VIII (Annual Review), following creation of the Townhome parcel in which construction of the townhomes has Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
55 Packet Pg. 498 of 638

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not commenced, Owner shall provide the City with a summary of its efforts to market the Townhomes and an analysis of market conditions related to the Townhomes.

Owner shall incorporate or cause to be incorporated into the Covenants, Conditions, and Restrictions for the Townhomes a condition prohibiting members of the homeowners’ association from participating in any Residential Preferential Parking District that includes the Townhome parcel.

Subject to the City’s remedies in Exhibit C and Section 9.1, Owner may complete, at any time dictated by the market, the conversion of use of the Park Building from automotive to R&D.

At all times following demolition of the portion of the Cannery and before the Commencement of Townhome Construction, Owner shall secure the Townhome Parcel, and ensure that it is free of public nuisances. If any issues arise with maintenance, the City and Owner shall meet and confer regarding the appearance and maintenance of the site.

Transportation Demand Management Program.

New non-residential uses on the Property (applicable to new tenants af ter the termination of the existing leases as of the Effective Date) shall be subject to the TDM Program that achieves a 15% reduction in single -vehicle-occupancy trips consistent with the Approvals. In addition, Owner shall implement, for tenants under existing leases as of the Effective Date, those elements of the TDM Program that that may be implemented by Owner without a lease amendment. The TDM Program contains contingency provisions to ensure the program can be modified as appropriate over time and the City’s approval of requested modifications to the TDM Program will not be unreasonably withheld or delayed.

Payment of Fees.
(a) Development Fees, Assessments, Exactions, and Dedications . Except as provided herein, Owner shall pay all applicable City fees, including processing fees, Development Impact Fees, in-lieu fees, water and sewer connection and capacity charges and fees; assessments; dedication formulae; and taxes payable in connection with the development, build-out, occupancy, and use of the Project that apply uniformly to all similar developments in the City at the rates in effect at the time Owner applies for a building permit approval in connection with the Project (regardless of whether such fees, assessments, dedication formulae or taxes became effective before, on or after the Effective Date). Provided, however, Owner shall not be required to pay any new or increased Development Impact Fees adopted after the Effective Date, with the exception of increases to adjust for inflation. Additionally, O wner may elect to defer payment of Development Impact Fees for the Townhomes until construction of the Townhomes, in which case the Development Impact Fees shall be paid on a pro-rata basis (1/74th) at final inspection for each residential unit.

City shall accept the dedication of the BMR/Parkland Dedication Parcel pursuant to Sections 5.3 and 6.2 and payment of the Public Benefit Fee as set forth in Section 5.8( b) in full and complete satisfaction of any and all parkland dedication requirements under Palo Alto Municipal Code Chapter 21.50 and inclusionary housing requ irements under Chapter 16.65. The City acknowledges and understands that the Owner intends to market the Townhomes to third party Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
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56 Packet Pg. 499 of 638

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homebuilders and that the necessary credits and documentation will be assignable to such builder(s).
(b) Public Benefit Fee. Owne r shall also pay a $5 million ($5,000,000.00) Public Benefit Fee to the City for its use toward affordable housing or parkland improvement in the City ’s sole discretion. Owner may elect to defer payment of the Public Benefit Fee until construction of the Townhomes, in which case it shall be paid on a pro-rata basis (1/74th) at final inspection for each residential unit. However, if Commencement of Townhome Construction has not occurred within 5 (five) years of the City’ s acceptance of the BMR/ Parkland Dedi cation Parcel, the Public Benefit Fee shall be increased in accordance with the increase in the Construction Cost Index for the San Francisco Bay Area from the Effective Date to the date of payment or partial payment, until payment in full. If final inspections for the Townhomes have not been approved by the Expiration Date, Owner shall pay the full Public Benefit Fee to the City on or before the Expiration Date. The City acknowledges and understands that the Owner intends to market the Townhomes to third party homebuilders and that the obligation to pay the Public Benefit Fee will be assignable to such builder(s) pursuant to Article XII.

ARTICLE VI — CITY PROMISES
Processing of Subsequent Approvals
Provided Owner is not in default of this Agreement, City shall promptly accept, review and shall not deny or unreasonably delay any Subsequent Approval, including all ministerial permits and inspections, necessary to the exercise of the rights vested in the Owner by this Agreement and all permits and approvals necessary to relocate the existing above-ground powerline necessary for construction of the Parking Garage. The Parties acknowledge and agree that the City’s compliance with this obligation directly and materially relates to the Owner ’s ability to timely perform its obligations under this Agreement.

Acceptance of BMR/Parkland Dedication Parcel
Provided Owner is not in default under this Agreement, and subject to Secti on 5.3, City shall expeditiously and in good faith review and accept Owner ’s offer of dedication for the BMR/Parkland Dedication Parcel as such offer is set forth on the Final Map. Following such offer of dedication, City shall promptly review and act upon any Subsequent Approvals for the Townhomes, whether or not the City has co mpleted its review and acceptance of the BMR/Parkland Dedication Parcel. The Parties further acknowledge and agree that: (a) subject only to, and without limiting, the provisions of Section 5.4 and this Section 6.2, Owner makes no representation or warranty, express or implied, regarding the title, physical, environmental, or legal condition of BMR/Parkland Dedication Parcel or its fitness or suitability for any particular purpose or use and City accepts dedication, title, and ownership of the BMR/Parkland Dedication Parcel in its “AS IS” and ‘WITH ALL FAULTS” condition; (b) City shall not be required to accept title to the BMR/Parkland Dedication Parcel subject to any deeds of trust or other monetary liens or encumbrances; (c) without limiting the foregoing, City accepts dedication, title, and ownership of the BMR/Parkland Dedication Parcel subject to (i) all matters of record, including easements, encumbrances, covenants, conditions, restrictions, reservations, and rights -of-way; (ii) installments of general and special real property taxes and ass essments not then delinquent; (iii) Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
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57 Packet Pg. 500 of 638

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any encumbrance or possessory interest arising from the acts of City; and (iv) matters that would have been disclosed by an inspection or a survey; and (d) except as otherwise expressly set forth in this Agreement, City shall be solely responsible for all costs and expenses attendant upon the transfer of title to the BMR/Parkland Dedication Parcel from Owner to City.

ARTICLE VII - EXCEPTIONS AND EXCLUSIONS
Subsequent Applicable Rules
Notwithstanding anything to the contrary in this Agreement, the following Subsequent Rules that are adopted on a general, City -wide or North Ventura Area -wide basis shall apply to development of the Property (“Subsequent Applicable Rules”):
(a) Subsequent Rules that relate to hearing bodies, petitions, appli cations, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure imposed at any time, provided such Subsequent Rules are uniformly applied throughout the City or the North Ventura Coordinated Area Plan area to all substantially similar types of development projects and properties, and such procedures are not inconsistent with procedures set forth in the Approvals or this Agreement.
(b) Subsequent Rules that are determined by City to be reasonably required in order to protect occupants of the Project, and/or residents of the City, from a condition dangerous to their health or safety, or both. This Section 7.1 is not intended to be used for purposes of general welfare or to limit the intensity of development or use of the Property but to protect and recognize the authority of the City to deal with material endangerments to persons on the Property not adequately addressed in the Approvals.
(c) Subsequent Rules that do not conflict with the Applicable Rules, this Agreement or the Approvals, provided such Subsequent Rules are uniformly applied throughout the City or the North Ventura Coordinated Area Plan area to all substantially similar types of development projects and properties; and
(d) Other Subsequent Rules that do not apply to the Property and/or the Project due to the limitations set forth above, but only to the extent that such Subsequent Rules are accepted in writing by Owner in its sole discretion.

Supervening Rules of Other Governmental Agencies
If any governmental entity or agency other than the City passes a law or regulation after the Effective Date which prevents or precludes compliance with one (1) or more provisions of this Agreement or requires changes in plans, maps, or permits approved by the City notwithstanding the existence of this Agreement, then the provisions of this Agreement shall, to the extent feasible, be modified or suspended as may be necessary to comply with such new law or regulation.

Immediately after enactment of any such new law or regulation, the parties shall meet and confer in good faith to determine the feasibility of any such modification or suspension based on the effect such modification or suspension would have on the purposes and intent of this Agreement. In addition, Owner shall have the right to challenge the new law or regulation preventing compliance with the terms of this Agreement, and, to the extent such challenge is successful, this Agreement Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
58 Packet Pg. 501 of 638

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shall remain unmodified and in full force and effect; provided, however, that Owner shall not develop the Project in a manner clearly inconsistent with a new law or regulation applicable to the Project and adopted by any governmental entity or agency other than the City, except to the extent that enforcement of such la w or regulation is stayed or such law or regulation is repealed or declared unenforceable or such law or regulation is not applicable to projects as to which a development agreement has been executed.

Building Codes.

The Project shall be constructed in accordance with the provisions of the California Building Code, Green Building Code, Mechanical, Plumbing, Electrical, and Fire Codes as adopted and amended by the City, City standard construction specifications and Title 24 of the California Code of Regulations, relating to building standards, in effect at the time of approval of the appropriate building, grading or other construction permits for the Project. Those codes, as modified from time to time, are Subsequent Applicable Rules.

Utility Services.

This Agreement does not limit the power and right of the City to adopt and amend from time to time rules and procedures governing the provision and use of utility services provided by the City. These rules, as modified from time to time, are Subsequent Applicable Rules.

No General Limitation of Future Exercise of Power
This Agreement does not limit the power and right of the City to adopt and amend from time to time rules and procedures governing the provision and use of utility services provided by the City.

Alternative Approvals.

Notwithstanding any provisions in this Development Agreement, Owner may apply for, and the City may thereafter review and grant, in accordance with applicable law: (i) amendments or modifications to the Approvals; or (ii) other approvals ( “Alternative Approvals ”) for the development of the Property in a manner other than that described in the Approvals. The issuance of any Alternative Approval which approves a change in the Permitted Uses, density or intensity of use, height or s ize of buildings, provisions for reservation and dedication of land, conditions, terms, restrictions, and requirements relating to subsequent discretionary actions, monetary contributions by the Owner, or in any other matter set forth in this Development Agreement, shall not require or constitute an amendment to this Development Agreement, unless Owner and the City desire that such Alternative Approvals also be vested pursuant to this Development Agreement. If this Development Agreement is not so amended, i t shall continue in effect unamended, although Owner shall also be entitled to develop the Property in accordance With the Alternative Approvals granted by the City, without such permits and approvals being vested hereby.

ARTICLE VIII - ANNUAL REVIEW
Annual Review.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
59 Packet Pg. 502 of 638

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The annual review required by California Government Code, Section 65865.1 shall be conducted pursuant to Resolution No. 7104 by the City’ s Planning Director every twelve (12) months from the Effective Date for compliance with the provisions hereof (the “Annual Review”).

The Planning Director shall notify Owner in writing of any evidence which the Planning Director deems reasonably required from Owner in order to demonstrate good- faith compliance with the terms of this Development Agreement. Such annual revie w provision supplements, and does not replace, the provisions of Article IX below whereby either the City or Owner may, at any time, assert matters whic h either party believes have not been undertaken in accordance with this Development Agreement by delivering a written Notice of Breach and following the procedures set forth in said Section 9.2. Owner shall pay the City’ s actual costs for its performance of the Annual Review, including staff time if and to the extent that more than two (2) hours of staff time is required to perform the annual review.

ARTICLE IX - DEFAULT, REMEDIES, TERMINATION
Remedies for Breach . City and Owner acknowledge that the purpose of this Development Agreement is to carry out the parties ’ objectives and local, regional, and Statewide objectives by developing the Project. The parties acknowledge that City would not have entered into this Development Agreement had it been exposed to damage claims from Owner for any breach thereof. As such, the parties agree that in no event shall Owner be entitled to recover any actual, consequential, punitive, or other monetary damages against City for breach of this Development Agreement. Therefore, City and Owner agree that, in the event of a breach of this Development Agreement, each of the parties hereto may pursue the following: (a) specific performance; (b) suits for declaratory or injunctive relief; (c) suits for mandamus or special writs; or (d) cancellation of this Development Agreement and Approvals, as set forth in Exhibit C. In
addition to the foregoing remedies, City shall be entitled to recover monetary damages with respect to actual monetary amounts payable by Owner under this Development Agreement. In no event will the City be entitled to consequential or punitive damag es from Owner. All of the above remedies shall be cumulative and not exclusive of one another, and the exercise of any one (1) or more of these remedies shall not constitute a waiver or election with respect to any other available remedy.

Notice of Breach.
(a) Prior to the initiation of any action for relief specified in Section 9.1 above because of an alleged breach of this Development Agreement, the part y claiming breach shall deliver to the other party a written notice of breach (a “Notice of Breach”). The Notice of Breach shall specify with reasonable particularity the reasons for the allegation of breach and the manner in which the alleged breach may be satisfactorily cured. (b) The breaching party shall cure the breach within thirty (30) days following receipt of the Notice of Breach; provided, however, if the nature of the alleged breach is nonmonetary and such that it cannot reasonably be cured within such thirty (30) day period, then the commencement of the cure within such time period and the diligent prosecution to completion of the cure thereafter at the earliest practicable date shall be deemed to be a cure, provided that if the cure is not so dilige ntly prosecuted to completion, then no additional cure period shall be required to be provided. If the alleged failure is cured within the time provided above, then no Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
60 Packet Pg. 503 of 638

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default shall exist, and the noticing party shall take no further action to exercise any remedies available hereunder. If the alleged failure is not cured, then a default shall exist under this Development Agreement and the non-defaulting party may exercise any of the remedies available under this Development Agreement.
(c) If, in the determination of the alleged breaching party, such event does not constitute a breach of this Development Agreement, the party to which the Notice of Breach is directed, within thirty (30) days of receipt of the Notice of Breach, shall deliver to the party giving the Notice of Breach a notice (a “ Compliance Notice ”) which sets forth with reasonable particularity the reasons that a breach has not occurred.

Applicable Law. This Development Agreement shall be construed and enforced in accordance with the laws of the State of California without reference to its choice of laws rules.

ARTICLE X —- AMENDMENTS
Modification Because of Conflict with State or Federal Laws. (a) In the event that State or Federal laws or regulations enacted after the Effective Date of this Development Ag reement prevent or preclude compliance with one (1) or more provisions of this Development Agreement or require changes in plans, maps, or permits approved by City, such modifications shall be governed by the provisions of Section 4.2 and Article VII . Any such amendment or suspension of this Development Agreement shall be approved by the City Council in accordance with the City Code and this Development Agreement and by Owner.
(b) In the event changes in State or Federal laws or regulations substantially interfere with Owner’s ability to carry out the Pr oject, as the Project has been approved, or with the ability of either party to perform its obligations under this Development Agreement, the parties agree to negotiate in good faith to consider mutually acceptable modifications to such obligations to allow the Project to proceed as planned to the extent practicable.

Amendment by Mutual Consent . This Development Agreement may be amended in writing from time to time by mutual consent of City and Owner, subject to approval by the City Council (except as otherwise provided herein), and in accordance with the procedures of State law and the City Code.

City Costs for Review. During the Term of this Development Agreement, Owner shall promptly reimburse City for costs incurred by City to have its staff, consult ant, or outside counsel review, approve, or issue assignments, estoppel certificates, transfers, amendments to this Development Agreement, and the like. Owner ’s obligations under this Section

10.3 shall survive
expiration or earlier termination of this Development Agreement.

Minor Amendments.
(a) The parties acknowledge that the provisions of this Development Agreement require a close degree of cooperation between City and Owner, and, during the course of implementing this Development Agreement and developing the Project, refinements and Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
61 Packet Pg. 504 of 638

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clarifications of this Development Agreement may become appropriate and desired with respect to the details of performance of City and Owner. If, and when, from time to time, during the Term of this Development Agreement, City and Owner agree that such a refinement is necessary or appropriate, City and Owner shall effectuate such refinement through a minor amendment or operating memorandum (the “Operating Memorandum”) approved in writing by City and Owner, which, after execution, shall be attached hereto as an addendum and become a part hereof. Any Operating Memorandum may be further refined from time to time as necessary wi th future approval by City and Owner. No Operating Memorandum shall constitute an amendment to this Development Agreement requiring public notice or hearing. (b) Notwithstanding the provisions of Section 10.5, and by way of illustration but not limitation of the above criteria for an Operating Memorandum, any refinement of this Development Agreement which does not affect: (a) the Term of the Devel opment Agreement as provided in Section 3.1; (b) the right to develop, and Permitted Uses of, the Property a s provided in this Development Agreement; (c) the general location of on-site and off-site improvements; (d) the density or intensity of use of the Project; (e) the maximum height or size of proposed buildings; (f) monetary contributions by Owner as provided in this Development Agreement; or (g) material modifications to public view opportunities of the monitor roofs/interior trusses of the Cannery Building or material modifications to essential historic elements of the Cannery Building as defined in Sectio n 5.2, shall be deemed suitable for an Operating Memorandum and shall not, except to the extent otherwise required by law, require notice or public he aring before either the Planning Director or the City Council before the parties may execute the Operating Memorandum; provided, that such amendment shall first be approved by Owner and the Community Development Director (or if the City does not then have a Planning Director, then by the holder of the position which includes the majority of the planning responsibilities held, as of the date of this Development Agreement, by the Planning Director); and provided further, that the Planning Director (or substitute) in consultation with the City Attorney shall make the determination on behalf of City whether a requested refinement may be effectuated pursuant to this Section 10.4 or whether the requested refinement is of such a character to constitute an major modification hereof pursuant to Section 10.5. The Planning D irector (or substitute) shall be authorized to execute any Operating Memoranda hereunder on behalf of City. Minor modifications to the Project as to the location, operational design, or requirements for maintenance of improvements shall be suitable for treatment through Operating Memoranda subject to the provisions of this Section 10.4, and not “major modifications” subject to the provisions of Section 10.5.

Amendment of Approvals. Approval of any major modifications to the Project or Approvals requires City Council approval and the approval of Owner. Any of the following amendments to Approvals shall be deemed a “major modification” and shall require an amendment of this Developm ent Agreement: (a) the term of the Development Agreement as provided in Section

3.1; (b) the right to develop, and Permitted Uses of, the Property as provided in this Development Agreement; (c) the general location of on -site and off -site improvements; (d) the density or intensity of use of the Project; (e) the maximum height or size of proposed buildings; (f) monetary contributions by Owner as provided in this Development Agreement; or (g) material modifications to the public view opportunities of the monitor roof/interior trusses of the Cannery Building or material modifications to essential historic elements of the Cannery Building as defined in Section 5.2. Such amendment shall be limited to those provisions of this Development Agreement, which are implicated by the amendment of the Approvals. Any other amendment of Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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Pg.
62 Packet Pg. 505 of 638

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the Approvals shall not require amendment of this Development Agreement unless the amendment of the Approvals relates specifically to some provision of this Development Agreement.

ARTICLE XI — COOPERATION AND IMPLEMENTATION
Cooperation. It is the parties’ express intent to cooperate with one another and to diligently work to implement this Agreement in a manner that ensures that all Parties realize the intended benefits of the Agreement.

City Processing.
(a) By City. City will not use its discr etionary authority in considering any application for a Subsequent Approval to change the policy decisions reflected by this Development Agreement or otherwise to prevent or delay development of the Project. The City shall cooperate with Owner in a reasonable and expeditious manner, in compliance with the deadlines mandated by applicable statutes or ordinances, to complete, at Owner’s expense, all steps necessary for implementation of this Development Agreement and development of the Project in accordance h erewith, including, without limitation, in performing the following functions to process the Project:
(i) Scheduling all required public hearings by the City Council, Planning Commission, Architectural Review Board, or other City bodies in accordance with the City ’s regularly established meeting schedule for these bodies; and (ii) Processing and checking all maps, plans, land use permits, building plans and specifications, and other plans relating to development of the Project filed by Owner or its nominees.
(b) By Owner. When Owner elects to proceed with construction of the Project or any part thereof, Owner, in a timely manner, shall provide City with all documents, applications, plans, and other information necessary for City to carry out its obligations hereunder, a nd Owner shall cause its planners, engineers, and all other consultants to submit in a timely manner all necessary materials and documents.

Other Governmental Permits . Owner shall apply prior to the expiration of the Term of this Development Agreement for approvals which may be required from other governmental or quasi -governmental agencies having jurisdiction over the Project as may be required for the development of , or provision of services to, the Project. City shall cooperate reasonably with Owner in its endeavors to obtain such permits and approvals at no cost to City. If such cooperation by City requires the approval of the City Council, such approval cannot be predetermined because decisions are made by a majority vote of the City Council.

ARTICLE XII — TRANSFERS AND ASSIGNMENTS
Transfers and Assignments . Owner may assign this Development Agreement with the express written consent of City, which consent shall not be unr easonably withheld, conditioned, or delayed. Owner may assign this Development Agreement in whole or in part as to the Property, in connection with any sale, transfer, or conveyance thereof, and upon the express Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
63 Packet Pg. 506 of 638

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written assignment by Owner and assumption by the assignee by an assignment and assumption agreement in substantially the form of Exhibit D, subject to prior approval of the City Manager and City Attorney, which approval shall not be unreasonably withheld or delayed, and the conveyance of Owner’s interest in the Property related thereto. Upon execution of an assignment and assumption agreement, Owner shall be released from any further liability or obligation hereunder related to the portion of the Property so conveyed and the assignee shall be deemed to be the “Owner,” with all rights and obligations related thereto, with respect to such conveyed property.

Covenants Run with the Land. All of the provisions, agreements, rights, powers, standards, terms, covenants, and obligations contained in this De velopment Agreement shall be binding upon the parties and their respective heirs, successors (by merger, consolidation, or otherwise), and assigns, devisees, administrators, representatives, lessees, and all of the persons or entities acquiring the Property or any portion thereof, or any interest therein, whether by operation of law or in any manner whatsoever, including foreclosure or deed in lieu of foreclosure, and shall inure to the benefit of the parties and their respective heirs, successors (by merge r, consolidation, or otherwise), and assigns. All of the provisions of this Development Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land pursuant to applicable law, including, but not limited to, Section 1468 of the Civil Code of the State of California. Each covenant to do or refrain from doing some act on the Property hereunder, or with respect to any City-owned property: (a) is for the benefit of such properties and is a burden upon such property; (b) runs with such properties; (c) is binding upon each party and each successive owner during its ownership of such properties or any portion thereof, and each person or entity having any interest therein derived in any manner through any owner of such proper ties, or any portion thereof; and (d) shall benefit each property hereunder, and each other person or entity succeeding to an interest in such properties.

ARTICLE XIII — MORTGAGE PROTECTION; CERTAIN RIGHTS OF CURE Mortgage Protection. This Development Agreement shall be superior and senior to any lien placed upon the Property or any portion thereof after the date of recording this Development Agreement, including the lien of any deed of trust or mortgage ( “Mortgage”).

Notwithstanding the foregoing, no breach hereof s hall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value, but all of the terms and conditions contained in this Development Agreement shall be binding upon and effective against any person or entity, including any deed of trust beneficiary or mortgagee ( “Mortgagee”) who acquires title to the Property, or any portion thereof, by foreclosure, trustee ’s sale, deed in lieu of foreclosure, or otherwise.

Mortgagee Not Obligated. Notwithstanding the provisions of Section 13.1 above, no Mortgagee shall have any obligation or duty under this Development Agreement to construct or complete the construction of improvements or to guarantee such construction or completion; provided, however, a Mortgagee shall not be entitled pursuant to this Development Agreement to devote the Property to any uses or to construct any improvements thereon other than those uses or improvements provided for or authorized by this Development Agreement or otherwise under the Approvals. Nothing in this Section

13.2 shall prevent or impair the right of any Mortgagee to apply to City for the approval of entitlements to construct other or different improvements than the Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
64 Packet Pg. 507 of 638

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Project, although this Development Agreement shall not be construed to obligate City to approve such applications, and City retains full and complete discretion with respect to consideration of any such applications for approval.

Notice of Default to Mortgagee . If City receives a notice from a Mortgagee requesting a copy of any notice of default given Owner hereunder and specifying the address for service thereof, then City shall deliver to such Mortgagee, concurrently with service thereon to Owner, any Notice of Breach given to Owner with respect to any claim by City that Owner has committed an event of default, and, if City makes a determination of noncompliance hereunder, City shall likewise serve notice of such noncompliance on such Mortgagee concurrently with service thereon on Owner. Each Mortgagee shall have the right during the same period available to Owner to cure or remedy, or to commence to cure or remedy, the eve nt of default claimed, or the areas of noncompliance set forth in City’s Notice of Breach.

ARTICLE XIV — GENERAL PROVISIONS
Project is a Private Undertaking. It is specifically understood and agreed by the parties that the development contemplated by this Developme nt Agreement is a private development, that City has no interest in or responsibility for or duty to third persons concerning any of said improvements, and that Owner shall have full power over the exclusive control of the Property herein described subject only to the limitations and obligations of Owner under this Development Agreement.

Notices, Demands, and Communications between the Parties . Formal written notices, demands, correspondence, and communications between City and Owner will be sufficiently given if dispatched by first -class mail, postage prepaid, or overnight courier, to the offices of the City and Owner indicated below. Such written notices, demands, correspondence, and communications may be sent in the same manner to such persons and addresses as either party may from time to time designate by mail as provided in this Section:

City: City Manager
City of Palo Alto
250 Hamilton Avenue
Palo Alto, California 94301
with copies to: City Attorney
City of Palo Alto, 8th Floor
250 Hamilton Avenue
Palo Alto, California 94301
Director of Planning and Development Services
City of Palo Alto, 5th Floor
250 Hamilton Avenue
Palo Alto, California 94301
Owner: SI 45, LLC
Attn: Tim Steele and Robert Tersini
c/o The Sobrato Organization
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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65 Packet Pg. 508 of 638

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599 Castro Street, Suite 400
Mountain View, CA 94041
With a copy to: Holland & Knight
Attn: Tamsen Plume
560 Mission Street, 19th Floor
San Francisco, CA 941051
Notices delivered by deposit in the United States mail as provided above shall be deemed to have been served forty-eight (48) hours after the date of deposit or if sent via overnight courier on the next business day.

Severability. Except as otherwise provided herein, if any provision of this Development Agreement is held invalid, the remainder of this Developme nt Agreement shall not be affected and shall remain in full force and effect unless amended or modified by mutual consent of the parties.

Section Headings. Article and Section headings in this Development Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants, or conditions of this Development Agreement.

Entire Agreement. This Development Agreement, including the Recitals and the Attachments to this Development Agreement which are each incor porated herein by reference, constitutes the entire understanding and agreement of the parties with respect to the subject matter hereof. The Attachments are as follows:

Exhibit A Legal Description
Exhibit B Plat
Exhibit C Schedule and Parties Obligations and Remedies for Default or Breach Exhibit D [Form of] Assignment and Assumption Agreement Estoppel Certificate. Either party may, at any time, and from time to time, deliver written notice to the other party requesting such party to certify in writing that, to the knowledge of the certifying party: (a) this Development Agreement is in full force and effect and a binding obligation of the parties; (b) this Development Agreement has not been amended or modified orally or in writing, and, if so amended, identif ying the amendments; (c) the requesting party is not in default in the performance of its obligations under this Development Agreement, or if in default, to describe therein the nature and amount of any such defaults; and (d) any other matter reasonably requested by the requesting party. The party receiving a request hereunder shall execute and return such certificate or give a written, detailed response explaining why it is not obligated to do so within twenty (20) business days following the receipt there of. Either the City Manager or the Planning Director of City shall have the right to execute any certificate requested by Owner hereunder. City acknowledges that a certificate hereunder may be relied upon by transferees and Mortgagees.

Statement of Intenti on. Because the California Supreme Court held in Pardee Construction Co. v. City of Camarillo, 37 Ca1.3d 465 (1984), that the failure of the parties therein to provide for the timing of development resulted in a later adopted initiative restricting the timing Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
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66 Packet Pg. 509 of 638

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of development and controlling the parties’ agreement, it is the intent of City and Owner to hereby acknowledge and provide for the right of Owner to develop the Project in such order and at such rate and times as Owner deems appropriate within the exercise of its sole and subjective business judgment, subject to the terms of this Development Agreement. City acknowledges that such a right is consistent with the intent, purpose, and understanding of the parties to this Development Agreement, and that without such a right, Owner ’s development of the Project would be subject to the uncertainties sought to be avoided by the Development Agreement Legislation and this Development Agreement.

Indemnification and Hold Harmless . Owner shall indemnify, defend ( with counsel reasonably acceptable to City) and hold harmless City and its elected and appointed officials, officers, employees, contractors, agents, and representatives (individually, a “ City Party,” and, collectively, “ City Parties ”) from and against any and all liabilities, obligations, orders, claims, damages, fines, penalties and expenses, including reasonable attorneys ’ fees and costs (collectively, “Claims”), including Claims for any bodily injury, death, or property damage, resulting directly or indirectly from the development, construction, or operation of the Project and, if applicable, from failure to comply with the terms of this Development Agreement, and/or from any other acts or omissions of Owner under this Development Agreement, whether such acts or omissions are by Owner or any of Owner ’s contractors, subcontractors, agents, or employees; provided that Owner’s obligation to indemnify and hold harmless (but not Owner’s duty to defend) shall be limited (and shall not apply) to the extent such Claims are found to arise from the gross negligence or willful misconduct of a City Party. This Section

14.8 includes any and all present
and future Claims arising out of or in any way connected with Owner ’s or its contractors ’ obligations to comply with any applicable State Labor Code requirements and implementing regulations of the Department of Industrial Relations pertaining to “ public works” (collectively, “Prevailing Wage Laws”), including all claims that may be made by contractors, subcontractors, or other third -party claimants pursuant to Labor Code Sections 1726 and 1781. Owner ’s obligations under this Section 14.8 shall survive expiration or earlier termination of this Development Agreement.

Recordation. Promptly after the Effective Date of this Development Agreement, the City Clerk shall have this Development Agreement recorded in the Official Records of Santa Clara County, California. If the parties to this Development Agreement or their successors in interest amend or cancel this Development Agreement as hereinabove provided, or if Cit y terminates or modifies this Development Agreement as hereinabove provided, the City Clerk shall record such amendment, cancellation, or termination instrument in the Official Records of Santa Clara County, California.

No Waiver of Police Powers or Rights . Except as expressly provided in this Agreement, in no event shall this Development Agreement be construed to otherwise limit in any way City’s rights, powers, or authority under the police power and other powers of City to regulate or take any action in the interest of the health, safety, and welfare of its citizens.

City Representations and Warranties . City represents and warrants to Owner that, as of the Effective Date:

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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Pg.
67 Packet Pg. 510 of 638

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(a) City is a California charter city and municipal corporation and has all necessary powers under the laws of the State of California to enter into and perform the undertakings and obligations of City under this Development Agreement. (b) The execution and delivery of this Development Agreement and the performance of the obligations of City hereunder have been duly authorized by all necessary City Council action, and all necessary City approvals have been obtained. (c) This Development Agreement is a valid obligation of City and is enforceable in accordance with its terms.

During the Term of this Development Agreement, City shall, upon learning of any fact or condition which would cause of any of the warranties and representations in this Section

14.11 not to be true, immediately give written notice of such fact or condition to Owner.

Owner Representations and Warranties. Owner represents and warrants to City that, as of the Effective Date:
(a) Owner is duly organized and validly existing under the laws of the State of California, and is in good standing, and has all necessary powers under the laws of the State of California to own property interests and in all other respects enter into and perform the undertakings and obligations of Owner under this Development Agreement. (b) The execution and delivery of this Development Agreement and the performance of the obligations of Owner hereunder have been duly authorized by all necessary corporate action and all necessary corporate authorizations have been obtained. (c) This Development Agreement is a valid obligation of Owner and is enforceable in accordance with its terms.
(d) Owner has not: (i) made a general assignment for the benefit of creditors; (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Owner’s creditors; (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Owner’s assets; (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Owner’s assets; or (v) admitted in writing its inability to pay its debts as they come due.

During the Term of this Development Agreement, Owner shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section

14.12 not to be true, immediately give written notice of such fact or condition to City.

Counterparts. This Development Agreement may be executed in one (1) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Waivers. Notwithstanding any other provision in this Development Agreement, any failures or delays by any party in asserting any of its rights and remedies under this Development Agreement shall not operate as a waiver of any such rights or remedies or deprive Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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any such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. A party may specifically and expressly waive in writing any condition or breach of this Development Agreement by the other party, but no such waiver shall constit ute a further or continuing waiver of any preceding or succeeding breach of the same or any other provision. Consent by one party to any act or failure to act by the other party shall not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or similar acts or failures to act in the future.

Time is of the Essence. Time is of the essence of this Development Agreement and of each and every term and condition hereof. All references to time in this Development Agreement shall refer to the time in effect in the State of California.

Venue. Any legal action regarding this Development Agreement shall be brought in the Superior Court for Santa Clara County, California.

Surviving Provisions. In the event this Development Agreement is terminated, neither party shall have any further rights or obligations hereunder, except for those obligations of Owner which by their terms survive expiration or termination hereof, including, but not limited to, those obligations set forth in Sections

10.3 and 14.8.

Construction of Agreement. All parties have been represented by counsel in the preparation and negotiation of this Development Agreement, and this Development Agreement shall be construed according to the fair meaning of its language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Development Agreement. Unless the context clearly requires otherwise: (a) the plural and singular numbers shall each be deemed to include the other; (b) the masculine, feminine, and neuter genders shall each be deemed to include the others; (c) “shall,” “will,” or “agrees” are mandatory, and “may” is permissive; (d) “or” is not exclusive; (e) “includes” and “including” are not limiting; and (f) “days” means calendar days unless specifically provided otherwise.

IN WITNESS WHEREOF, City and Owner have executed this Development Agreement as of the date first written above.

Signatures to follow on next page
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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69 Packet Pg. 512 of 638

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“City”:

CITY OF PALO ALTO,
a California charter city and municipal corporation
By:

Name:

Title:

Attest:

Name:

Title:

APPROVED AS TO FORM:

Name:

Title:

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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Pg.
70 Packet Pg. 513 of 638

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“Owner”:

SI 45, LLC,
a California limited liability company
By:

Name:

Title:

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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Pg.
71 Packet Pg. 514 of 638

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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California }
} ss.

County of Santa Clara }
On ______________________________, before me, ___________________, a Notary Public in and for said County and State, personally appeared _____________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct.

WITNESS my hand and official seal

NOTARY PUBLIC, STATE OF CALIFORNIA
My Commission #_______________
Expires: _____________________
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
72 Packet Pg. 515 of 638

HK 8 18 23

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California }
} ss.

County of Santa Clara }
On ______________________________, before me, ___________________, a Notary Public in and for said County and State, personally appeared _____________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct.

WITNESS my hand and official seal

NOTARY PUBLIC, STATE OF CALIFORNIA
My Commission #_______________
Expires: _____________________
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

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-1-

EXHIBIT A

LEGAL DESCRIPTION
Real property in the City of Palo Alto, County of Santa Clara, State of California, described as follows:

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
74 Packet Pg. 517 of 638

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EXHIBIT B
PLAT

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
75 Packet Pg. 518 of 638

-3-

EXHIBIT C
SCHEDULE OF PARTIES’ OBLIGATIONS AND

REMEDIES FOR DEFAULT OR BREACH
# Deadline Owner and City Phasing Obligations
and Remedies
1 Ongoing from Effective Date to
completion of Townhomes.

Owner to provide regular updates to the
City regarding the status of the Project,
permitting, construction and marketing
efforts, and City to provide the Owner
with regular updates regarding the status
of any permits or approvals under
review.

Prior to Physical Work Commencing.
2 Within 90 Days of Effective Date Owner has prepared and submitted applications, including all applicable
application fees, for the necessary
ministerial permits for Phase A as
described in the Project Approvals,
including (i) relocation of the City’s
above ground powerline, (ii) the Parking
Garage, (iii) the rehabilitation/renovation
of the Remaining Cannery (including the
Retail/Display and Outdoor Seating
Area), and (iv) demolition of the portion
of the Cannery (the “Phase A Work”)
consistent with this Agreement and the
Approvals. City’s exclusive remedy for
an Owner’s failure to meet this deadline
for this Section is termination of the
Agreement and Approvals.

The City will accept and process such
permit applications expeditiously and in
good faith pursuant to Section

6.1. Owner’s exclusive remedy for the
City’s Default in processing is (1)
specific performance and (2) an
extension to this and all remaining
deadlines in this schedule.
3 Within 90 days of the City issuance of
a permit ready letter(s) for all Phase
Owner has Commenced Construction on
the Phase A Work. For the purposes of
this Section, “Commenced Construction”
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
76 Packet Pg. 519 of 638

-4-
# Deadline Owner and City Phasing Obligations
and Remedies
A work (upon Owner’s payment of all
applicable fees) to Owner.
means the Owner has obtained all
necessary ministerial permits (including
the payment of all applicable fees),
entered a construction contract and
started physical grading and/or site
preparation work related to the Phase A
Work. City’s exclusive remedy for an
Owner’s failure to meet this deadline for
this Section is termination of the
Agreement and Approvals.

Once Owner Commences Construction
on the Phase A Work, as long as the
Owner is in good faith compliance with
all applicable permits related to such
work, the City will no longer have the
right to terminate the Approvals (as
opposed to the Agreement). In the event
Owner Abandons the Phase A Work, the
City retains the right to terminate both
the Agreement and the Approvals. For
the purposes of this Section “Abandons”
means the Owner has stopped all work
for more than 180 consecutive days
without a good faith reason, extension or
Event of Force Majeure.

The City will issue such permits, subject
to Owner’s submittal of all required
plans, information and fees,
expeditiously and in good faith pursuant
to Section 6.1. Owner’s exclusive
remedy for the City’s Default in issuing
permits requested by Owner is (1)
specific performance and (2) an
extension to this and all remaining
deadlines in this schedule.

After Physical Work Commences, but Prior to Recordation Final Map Creating Townhome Parcel and BMR/Park Dedication Parcel.
4 24 months from Commencement of
Construction of the Phase A Work.

Owner has completed the Parking
Garage (meaning the City has issued a
final inspection and cars are allowed to
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
77 Packet Pg. 520 of 638

-5-
# Deadline Owner and City Phasing Obligations
and Remedies
park in the structure in the normal
course) and completed Demolition of the
applicable portion of the Cannery. For
the purposes of this Section
“Demolition” means either that (i) the
portion of the building is removed so that
there is no longer a building over a new
property line creating the Townhome
Parcel or (ii) the City approves the
recordation of the Final Map creating the
Townhome Parcel with the portion of the
Cannery to remain vacant and
unoccupied on the property line until
issuance of build permit for the
Townhomes. City’s exclusive remedies
for an Owner’s failure to meet this
deadline for this Section are (1) specific
performance; (2) termination of the
Agreement, and/or (3) the City may
withhold occupancy permits for New
R&D uses in the Remaining Cannery,
and/or Park Building. For the purpose of
this Section “New” means a use that is
not subject to an existing lease as of the
Effective Date. If a New R&D use has
occupied the Park Building (subject to
the required notices to such tenant of the
requirements of this Agreement), the
City also has the remedy to require such
user to cease any R&D use of the Park
Building within three (3) years of the
tenant’s initial occupancy.

The City will schedule inspections and
issue final inspections expeditiously and
in good faith pursuant to Section

6.1. Owner’s exclusive remedy for the
City’s Default in issuing final
inspections is (1) specific performance
and (2) an extension to this and all
remaining deadlines in this schedule
pursuant.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
78 Packet Pg. 521 of 638

-6-
# Deadline Owner and City Phasing Obligations
and Remedies
5 Within 60 days of City’s issuance of
final certificates of occupancy for all
of the Phase A Work (including the
Demolition of the portion of the
Cannery Building as defined above).

Owner has submitted a request, with all
supporting documentation and applicable
fees, to the City to record a Final Map
that includes both the creation of the
Townhome Parcel and the BMR/Park
Dedication Parcel consistent with this
Agreement and the Approvals. City’s
exclusive remedies for an Owner’s
failure to meet this deadline for this
Section are (1) specific performance; (2)
termination of the Agreement, and/or (3)
the City may withhold occupancy
permits for New R&D uses in the
Remaining Cannery and/or Park
Building. For the purpose of this Section
“New” means a use that is not subject to
an existing lease as of the Effective Date.

If a New R&D use has occupied the Park
Building (subject to the required notices
to such tenant of the requirements of this
Agreement), the City also has the
remedy to require such user to cease any
R&D use of the Park Building within
three (3) years of the tenant’s initial
occupancy.

The City will process such Final Map in
expeditiously and in good faith pursuant
to Section 6.1. The City will not
withhold recordation of the Final Map
for acceptance of the BMR/Park
Dedication Parcel if the Final Map is
otherwise ready to record consistent with
this Agreement and the
Approvals. Owner’s exclusive remedy
for the City’s Default in processing is (1)
specific performance and (2) an
extension to this and all remaining
deadlines in this schedule.

After Recordation of Final Map Creating Townhome Parcel and BMR/Park Dedication Parcel, but Prior to Acceptance by City and/or Completion of Townhomes.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
79 Packet Pg. 522 of 638

-7-
# Deadline Owner and City Phasing Obligations
and Remedies
6 N/A Once Owner has recorded the Final Map
creating the Townhome Parcel and
BMR/Park Dedication Parcel, including
an offer on the Final Map to dedicate the
BMR/Park Dedication Parcel to the City
in fee, the City may not withhold
demolition permits, grading permits (if
not previously issued), building permits,
occupancy permits, permits for offsite
improvements, or any other post-
discretionary entitlements development
permits under this Agreement related to
the Remaining Cannery, Park Building,
Ash Building or Townhomes. The
City’s exclusive remedies are (1)
termination of this Agreement (but not
the Approvals) or (2) specific
performance.

The City will accept the offer of
dedication expeditiously and in good
faith pursuant to Section 6.2. Owner’s
exclusive remedy for the City’s Default
in accepting the offer of dedication is (1)
specific performance and (2) an
extension to all remaining deadlines in
this schedule.

After BMR/Park Dedication Accepted by City but Prior to Completion of Townhomes.
7 End of Term The City and Owner acknowledge the
Townhomes will be constructed at the
time dictated by the market, but in the
event the Townhomes have not been
constructed by the end of the Term,
Owner will pay the full amount of the
Public Benefit Fee to the City pursuant
to Section 5.8(b). The City’s exclusive
remedy for an Owner Default in the
payment of the Public Benefit fee is
specific performance.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
80 Packet Pg. 523 of 638

-8-
In addition to notice and opportunity to cure as provided in Section 9.2 , extensions by formal written amendment as provided in Section 10.2, and Force Majeure, the deadlines in this Exhibit C may be extended by each or a combination of the following:
• City Extension: The deadlines set forth in this Exhibit C are subject to a ninety (90) day extension, provided (1) that the Owner submits a written request for an extension prior to the deadline which shall include the rationale for the request and summary of the actions Owner has taken to satisfy the obligation prior to the deadline and (2) the extension request is approved by the City Manager, which such approval shall not be unreasonably withheld or delayed.
• Owner Extension. The deadlines set forth in this Exhibit C are also subject to a maximum of six extensions of 30 days each (no more than 180 days) upon written notice to City and an increase of $25,000 for each such 30-day extension shall be added to the Public Benefit Fee.
• City Review: The deadlines set forth in this Exhibit C are each contingent upon the City reviewing and providing comments or approving the ministerial permit and improvement plans submitted by Owner within thirty (30) days of submission of complete plans. This 30-day period shall commence anew each time that Owner submits revised plans in response to City comments on the prior version of the permit or improvement plans. Owner shall be solely responsible for submitting complete plans that satisfy all code and City requirements. Owner shall be responsible for payment of all required City building permit fees including costs for City to retain contract plan check services. In the event that City review exceeds 30 days, the rel evant deadline set forth in this Section 13 shall be extended one day for each day the City review exceeds 30 days.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
81 Packet Pg. 524 of 638

-9-

EXHIBIT D

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Attn:
(Space Above for Recorder’s Use)
[FORM OF] ASSIGNMENT OF RIGHTS AND ASSUMPTION OF OBLIGATIONS

UNDER DEVELOPMENT AGREEMENT
(______________)

THIS ASSIGNMENT OF RIGHTS AND ASSUMPTION OF OBLIGATIONS UNDER DEVELOPMENT AGREEMENT (this “Assignment”) is made and entered into as of _________, 20__, by and between _______, a _________ ( “Assignor”), and __________________, a ____________ ( “Assignee”), and approved and agreed to by the City of ______, a ________ (“City”).

RECITALS
A. Assignor and City entered into that certain Development Agreement dated as of ______ for the _____ project, and recorded on _____ in the Official Records of the _____ County Recorder’s Office ( “Official Records ”) as Document No. _______, (the “Development Agreement”), with respect to approximately ____ acres of land within the City, as more particularly described in Exhibit A attached hereto (the “Property”).

B. Assignor and Assignee have entered into that certain Agreement for Purchase and Sale ____________ dated ____________ (as may be amended from time to time, the “ Purchase Agreement”), pursuant to which Assignor intends to transfer to Assignee the Property.

Concurrently with transfer of the Property to Assignee, and solely in connection with such transfer in accordance with the Purchase Agreement, Assignor desires to assign to Assignee, and Assignee desires to accept from Assignor the rights, interests and obligations as Owner under the Development Agreement.

C. Section 12.1 of the Development Agreement provides that the Owner shall be released from its obligations under the Development Agreement upon the assignment of the Owner’s rights, interests and obligations under the Development Agreement if the City agrees to such release in writing, and Assignor wishes to memorialize that, upon the effective date of this Assignment, as set forth in Section 4 hereof, Assignor is hereby fully released from the duties and obligations of “Owner” with respect to the Development Agreement, including, without limitation, the Project Approvals, which release is hereby given by t he City’s execution of this Assignment as provided below.

AGREEMENTS
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
82 Packet Pg. 525 of 638

-10-
NOW, THEREFORE, in consideration of the foregoing recitals and for the purposes and in consideration of the mutual covenants hereinafter contained, and for other good and valuable consideration, the receipt of which is hereby acknowledged, Assignor and Assignee agree as follows:

1. Defined Terms. All capitalized terms used but not defined in this Assignment shall have the meanings given to them in the Development Agreement.

2. Assignment and As sumption. Assignor hereby assigns to Assignee and Assignee hereby expressly and unconditionally assumes from Assignor, all rights, title, duties, interests and obligations under the Development Agreement.

3. Compliance with Assignment Requirements; Release. Approval of this Assignment by the City pursuant to Section 12.1 of the Development Agreement is an express condition precedent to the effectiveness of this Assignment. Each of Assignor and Assignee has complied with and satisfied all of the requirements and conditions under the Development Agreement with respect to assignment and assumption of the Assigned Interests, and all of the requirements and conditions under the Development Agreement for the release of Assignor from those obligations related to the Assigned Property and the Assigned Interests (collectively, the “Requirements”). Upon approval by the City, Assignor shall be fully releas ed from all of the duties, obligations and liabilities of the “Owner” under the Development Agreement with respect to the Assigned Interests.

Assignee on behalf of itself and its successors and assigns, waives any right to recover from, and forever releases, acquits and discharges, Assignor and its directors, officers, employees and agents of and from any and all claims, demands, losses, liabilities, damages (including foreseeable and unforeseeable consequential damages), liens, obligations, interest, inj uries, penalties, fines, lawsuits and other proceedings, judgments and awards and costs and expenses, (including, without limitation, reasonable attorneys’ fees and costs and consultants’ fees and costs) of whatever kind or nature, known or unknown, contingent or otherwise, whether direct or indirect, known or unknown, foreseen or unforeseen, that Assignee may now have or that may arise at any time on account of or in any way be connected with the Development Agreement.

In connection with the foregoing rele ase, Assignee acknowledges that it is familiar with Section 1542 of the California Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR

DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME

OF EX ECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST

HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Assignee agrees that the release contemplated by this Section includes unknown claims.

Accordingly, Assignee hereby waives the benefits of Civil Code Section 1542, or under any other statute or common law principle of similar effect, in connection with the releases contained in this Section.

Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
83 Packet Pg. 526 of 638

-11-

Assignor Assignee
Without limiting the foregoing and notwithstanding any contrary provision in the Development Agreement, City (i) acknowledges and agrees to the terms and conditions of this Assignment and that the Requirements have been satisfied, (ii) hereby fully releases Assignor, and Assignor is fully released, from all of the duties and obl igations of the “ Owner” under the Development Agreement and (iii) shall look solely towards Assignee with respect to performance, compliance and satisfaction of all covenants and obligations of Developer related to the Assigned Property.

4. Effective Date. Subject to the condition precedent set forth in Section 3 above, this
Assignment shall be effective upon the later to occur of (i) the date all Parties have duly executed this Assignment and (ii) the date of the transfer of the Assigned Property to Assignee (the “Effective Date” ). The Parties shall use a mutually acceptable escrow agent to record this Assignment Agreement and establish the Effective Date pursuant to mutually acceptable joint escrow instructions.

5. Acknowledgement of the Development Agreement and Project Approvals .

Assignee further agrees that: (i) Assignee has had adequate opportunity to obtain and review copies of the Development Agre ement and Project Approvals, and all other documents and materials containing or relating to the terms and conditions of the development of the project; (ii) Assignee has read and understands all of the terms and conditions of said documents and materials; (iii) Assignor has not made any representations or warranties with respect to the Assigned Property, the Project Approvals or any other aspect of development of the Property or the Development Agreement, and (iv) with such knowledge and understanding, which includes the nature and extent of the fees, taxes, assessments and other financial mechanisms and obligations described in such documents and materials, Assignee nevertheless has voluntarily, freely and knowingly assumed and agreed to perform all obligations and requirements and be bound by all of the provisions of such documents and materials.

6. Terms of Development Agreement Not Affected . Except that Assignee shall be subject to, and Assignor shall be released from, the Development Agreement, the provisions of the Development Agreement shall remain in full force and effect and shall not be altered, amended or modified by this Assignment.

7. Modifications. This Assignment may be amended, terminated or otherwise modified in any respect only by a writing duly executed on behalf of Assignor and Assignee and approved by the City.

8. Attorneys’ Fees. In the event of any controversy, claim, dispute, or litigation between the parties hereto to enforce or interpret any of the provisions of this Assignment or any right of either party hereto, the non- prevailing party to such litigation agrees to pay to the prevailing party all costs and expenses, including, without limitation, reasonable attorneys ’ fees, incurred therein by the prevailing party, including, without limitation, fees incurred during a trial of any action and any fees incurred as a result of an appeal from a judgment entered in such litigation. To so recover, it shall not be necessary that the prevailing party prevail in each and every Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
84 Packet Pg. 527 of 638

-12-
one of its claims. Rather, the amount of the award of attorneys’ fees shall, in the court’s discretion, reflect the degree to which the prevailing party or parties have prevailed in some of their claims.

9. Consent of City. By signature of the City Manage r below, the City approves and agrees to the assignment, assumption and release set forth in this Assignment. The City is a party to this Assignment solely respect to Section 3 and Section 4 hereof.

10. Governing Law . This Assignment shall be governed by and construed in accordance with the laws of California, as they apply to contracts executed in and to be carried out entirely within California.

11. Further Assurances. Each party to this Assignment, upon the request of any other party to this Assignment, will execute, acknowledge and deliver such further documents or instruments and perform such further acts as may be necessary, desirable or proper to carry out more effectively the purpose of this Assignment. Each of the individuals executing this Assignment certifies that he or she is duly authorized to do so.

12. Counterparts. This Assignment may be executed in one or more counterparts. All counterparts so executed shall constitute one agreement, binding on all parties, even though all parties are not signatory to the same counterpart.
[Signatures appear on the following page]
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
85 Packet Pg. 528 of 638

-13-
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the date and year first above written.

ASSIGNOR:
__________, a ____________
By:

Name:

Its:

By:

Name:

Its:

ASSIGNEE:
______________________, a
________________________
By:

Name:

Its:

By:

Name:

Its:

ATTEST:

By:

APPROVED AS TO FORM:

By:

ACKNOWLEDGED AND APPROVED
TO BY CITY:

CITY OF PALO ALTO, _________
By:

Name:

Its:
[Signatures must be notarized]
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
86 Packet Pg. 529 of 638

HK 8 18 23

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
[See attached]
Item 8
Attachment F - Ordinance
Approving a Development
Agreement with SI 45,
LLC, for the 14.65-acre
Property Located at 200-
404 Portage Avenue,
3040-3250 Park
Boulevard, 3201-3225
Ash Street, and 278
Lambert Avenue

Item 8: Staff Report
Pg.
87 Packet Pg. 530 of 638

City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: October 2, 2023
Report #:2309-2032
TITLE
SECOND READING: Ordinance Creating New Chapter 12.11 (Parklets) and Amending Certain Sections of Titles 16 and 18 (FIRST READING: September 11, 2023 PASSED 7-0)

BACKGROUND
This was heard by the City Council on September 11, 2023 for a first reading and was approved 7-0. No changes were made to the Ordinance; it is now before you for a second reading.

ATTACHMENTS
Attachment A: Ordinance Creating an Ongoing Parklet Program APPROVED BY:

Mahealani Ah Yun, Interim City Clerk
Item 9
Item 9 Staff Report

Item 9: Staff Report
Pg.
1 Packet Pg. 531 of 638

NOT YET ADOPTED
274_20230830_ts24 1

Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Creating an Ongoing Parklet Program

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1
. Findings and Declarations. The City Council finds and declares as follows:

1. During the COVID- 19 epidemic, the City of Palo Alto allowed commercial businesses to operate on public streets, parking lots, and other City right-of-ways and real property. At the outset, these uses were permitted, in part, in recognition of the higher risk of COVID- 19 transmission in enclosed indoor spaces.

2. These uses were first permitted under Ordinance 5500, adopted June 23, 2020, and continued under subsequent interim ordinances. These uncodified interim ordinances automatically sunset after specified amounts of time and required the City Council to re- authorize the interim parklet program several times.

3. Through this ordinance, t he City Council now desires to establish an ong oing parklet program by creating new PAMC Chapter 12.11 (“Parklets”). In addition, the City Council seeks to amend specific sections of Titles 16 (Building Regulations) and 18 (Zoning Requirements) to exempt parklets from some existing requirements.

4. As part of an ongoing parklet program, this ordinance is being considered with additional pieces of legislation: (1) an ordinance to create new parklet fees in the Municipal Fee Schedule; (2) a resolution to create new administrative penalties in the Adminsi trative Penalty Schedule; and (3) a resolution to designate certain areas of the University Avenue downtown and the California Avenuue area pursuant to new PAMC section 12.11.040 to generally allow for parklets in that area.

SECTION 2
. New chapter 12.11 (Parklets) is hereby added to Title 12 (Public Works and Utilities) to read as follows:

Chapter 12.11
Parklets

12.11.010 Definitions
The following definitions apply to this Chapter:

(a) Parklet is a fixed encroachment placed in the curbside lane that is used principally for commercial activity to the general public.

(b) Person includes a natural person or any type of corporate entity recognized by law, or any combination thereof.

Item 9
Attachment A - Ordinance
Creating an Ongoing
Parklet Program

Item 9: Staff Report
Pg.
2 Packet Pg. 532 of 638

NOT YET ADOPTED
274_20230830_ts24 2

12.11.020 Permit required
No person shall erect, construct, alter, repair, raise, build or move any parklet or portion thereof upon any easement, right-of-way or parcel of land conveyed, granted or dedicated in any manner to the city for street, drainage, sewer or public utility purposes, provided that the Director of Public Works or designee may grant a revocable permit to the owner to construct such structure or to do such work when in their opinion the construction and maintenance thereof would not interfere with any city facilities located in such easement and would not be detrimental to the best interest of the city.
(a) Such permit shall be subject to revocation at any time by the Director of Public Works or designee and would be subject to such terms and conditions as the city manager or designee may consider reasonable for the protection of the best interests of the city including but not limited to provisions that the permittee shall hold the city, its officers, agents and employees free and harmless from any liability for injuries to persons or property resulting from the construction or maintenance of such encroachment and that the re moval of the structure when so requested by the city manager or designee shall be at the permittee's expense. (b) Such permit shall also provide that upon failure of the permittee to remove such structure within a reasonable time after notice from the city manager or his designee, the same may be abated and removed by the city and the cost thereof billed to the permitteee.
(c) Notwithstanding PAMC Section 2.30.210(h), the Director of Public Works or their designee may execute a permit issued under this Chapter that includes the rent, lease, license or use of City real property for a term up to three years at a time. (d) If the City is required to move or alter City infrastructure in order to enable a parklet to be located in a specific location, the City may seek reimbursement of such costs as a condition of granting the permit.
(e) Permits issued under this Chapter shall not be transferable. In the case a permittee intends to transfer operation of a parklet to another person, the new proposed operator must apply for a new permit.
(f) No person shall encumber any City property interest granted under this Chapter and any such encumbrance shall be void as a matter of law.
(g) Permits shall be issued only in areas designated pursuant to PAMC section 12.11.040. (h) Parklets shall not be eligible for an encroachment permit under PAMC Chapter 12.10.

12.11.030 Fees
All applicable fees authorized by the City’s Municipal Fee Schedule must be paid prior to the issuance or renewal of any permit issued under this Chapter. A permit shall not be valid unless and until all applicable fees are paid to the City.

12.11.040 Location and Uses of Parklets
The City Council shall, by ordinance or resolution, designate area(s) of the City in which Director of Public Works or designee may issue permits for parklets under this Chapter. The City Council shall also specify the allowable uses for parklets in such area(s). Such designation does not Item 9
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require the City to issue a permit to any specific person or location within such area(s) or grant any vested rights to any person under this Chapter.

12.11.050 Regulations
The Director of Public Works or designee may promulgate regulations relating to the use, placement, location, construction, maintenance, cleaning, operation, safety, and removal of parklets, as well as administration of this Chapt er. This authority shall be construed as broadly as possible but shall not be interpreted to conflict with any other provision of this Chapter or other applicable laws.

12.11.060 Violations
It is unlawful for any person to violate any provision or to fail to comply with any of the requirements of this chapter, any permits or conditions thereof granted under this chapter, and any regulations promluated under this chapter. Violators shall be subject to any penalty or penalties authorized by law, including but not limited to: suspension or termination of permit(s) granted under this Chapter; administrative enforcement pursuant to Chapters 1.12 and 1.16 of this code; and criminal enforcement pursuant to Chapter 1.08 of this code. Each separate day or any portion thereof during which any violation occurs or continues shall be deemed to constitute a separate offense.

A person who is the holder of a permit which is terminated by the City under this Section shall not be eligible for any new permit under this Chapter for one year from either (1) the date of termination or (2) the date the parklet is fully removed from its location as determined by the City, whichever is later.

12.11.070 Violations Declared a Public Nuisance
Any parklet constructed, altered, moved, replaced, or otherwise maintained, or any use of property in a manner contrary to the provisions of this chapter and all permits and regulations issued pursuant to it, is unlawful and a public nuisance, and the City may commence such action or actions, proceeding or proceedings as may be deemed appropriate for the abatement, removal, and enjoinment thereof in the manner provided by law, and shall take such other steps and shall apply to such court or courts as may have jurisdiction to grant such relief as will abate and remove such building or use and restrain and enjoin any person, firm, or corporation from constructing, altering, moving, replacing, or otherwise maintaining any parklet, or using any property in a manner contrary to the provisions of this title. The remedies permitted for a public nuisance shall not be exclusive and the City may take any enforcement action available under law.

12.11.080 Enforcement - Criminal Enforcement Authority
The employee positions designated in this section are authorized to exercise the authority provided in California Penal Code section 836.5 for violations of this chapter. The designated employee positions are: (1) Chief Building Official; (2) City engineer; (3) code enforcement officer (including supervisor and lead) ; (4) Engineering Technician III within the Public Works Item 9
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Department; (5) Senior Engineer within the Public Works Department; ( 6) Director of Public Works; and (7) Assistant Director of Public Works.

SECTION 3. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) is amended to add a definition for ‘Parklet’ as follows (new text underlined):

18.04.030 Definitions
(a) Throughout this title the following words and phrases shall have the meanings ascribed in this section.
. . .
(112.1) “Parklet” means an fixed encroachment placed within a public right of way with appropriate safety installations and constructed in accordance with established standards with approval of a permit per PAMC Chapter 12.11. . . .

SECTION 4
. Section 18.16.060 (Development Standards) of Chapter 18.16 (Neighborhood, Community, and Service Commercial Districts, CN, CC and CS Districts) of Title 18 (Zoning) is amended as follows:

18.18.060 Site Development Standards
. . .
(h) Outdoor Sales and Storage:

(1) In the CN district, all permitted office and commercial activities shall be conducted within a building, except for:
(A) Incidental sales and display of plant materials and garden supplies occupying no more than 500 square feet of exterior sales and display area, (B) Farmers’ markets that have obtained a conditional use permit, and (C) Recycling centers that have obtained a conditional use permit. (D) Parklets that have obtained a permit per PAMC Chapter 12.11. (2) In the CC district and in the CC(2) district, the following regulations shall apply to outdoor sales and storage:
(A) Except in shopping centers, all permitted office and commercial activities shall be conducted within a building, except for:
(i) Incidental sales and display of plant materials and garden supplies occupying no more than 2,000 square feet of exterior sales and display area, (ii) Outdoor eating areas operated incidental to permitted eating and drinking services or intensive retail uses, including parklets permitted under PAMC Chapter 12.11, (iii) Farmers’ markets that have obtained a conditional use permit, and (iv) Recycling centers that have obtained a conditional use permit (B) Any permitted outdoor activity in excess of 2,000 square feet shall be subject to a conditional use permit; parklets on public property approved via permit per PAMC Chapter

12.11 are exempt from this section.
. . .

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(3) In the CS district, outdoor sales and display of merchandise, and outdoor eating areas operated incidental to permitted eating and drinking services shall be permitted subject to the following regulations:
(A) Outdoor sales and display shall not occupy a total site area exceeding the gross building floor area on the site, except as authorized by a conditional use permit. Parklets on public property approved via permit per PAMC Chapter 12.11 are exempt from this section. . . .

SECTION 5. Section 18.18.060 (Development Standards) of Chapter 18.18 (Downtown Commercial CD District) of Title 18 (Zoning) is amended as follows:

18.18.060 Site Development Standards
. . .
(h) Outdoor Sales and Storage: The following regulations shall apply to outdoor sales and storage in the CD district:
(1) CD-C Subdistrict; In the CD-C subdistrict, the following regulations apply:
. . .
(B) Any permitted outdoor activity in excess of 2,000 square feet shall be subject to a conditional use permit; parklets on public property approved via permit per PAMC Chapter

12.11 are exempt from this section.

SECTION 6. Section 18.42.090 (Alcoholic Beverages) of Chapter 18.42 (Standards for Special Uses) of Title 18 (Zoning) shall be amended as follows:

18.42.090 Alcoholic Beverages
. . .
(e) Alcohol Service in Parklets on Rights of Way: Establishments that are allowed by the City to serve alcohol for onsite consumption by issuance of a conditional use permit (“CUP”) as required in this section or as a legal nonconforming use, and that have both an on -sale license from the Department of Alcoholic Beverage Control (“ABC”) and are duly auth orized by ABC to serve alcohol in outdoor areas, shall be allowed to serve alcohol for onsite consumption without an amendment of the CUP in parklets on public property approved via permit per PAMC Chapter

12.11 or other outdoor uses approved via permit pe r any other relevant section of the PAMC.

Outdoor alcohol service shall be in full compliance with all applicable regulations, including ABC regulations, as may be amended.

SECTION 7. Section 18. 52.040 (Off-Street Parking, Loading and Bicycle Facility Requirements) of Chapter 18.52 (Parking and Loading Requirements) of Title 18 (Zoning) shall be amended as follows:

18.52.40 Off-Street Parking, Loading and Bicycle Facility Requirements . . .

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(10) The area of a parklet permitted per Chapter 12.11 shall not be counted toward a business’ gross floor area for the calculation of minimum off -street parking requirements whether within a parking assessment district or outside of parking assessment districts

SECTION 8. Section 18. 76.010 (Conditional Use Permit ) and Section 18.76.020 (Architectural Review) of Chapter 18.76 (Permits and Approvals) of Title 18 (Zoning) shall be amended as follows:

18.76.010 Conditional Use Permit
(b) Applicability
. . .
(4) Establishments that are allowed by the City to serve alcohol for onsite consumption by issuance of a conditional use permit (“CUP”) as required in this section or as a legal nonconforming use, and that have both an on- sale license from the Department of Alcoholic Beverage Control (“ABC”) and are duly authorized by ABC to serve alcohol in outdoor areas, shall be allowed to serve alcohol for onsite consumption without an amendment of the CUP in parklets on public property approved via permit per PAMC Chapter 12.11 or other outdoor uses approved via permit per any other relevant section of the PAMC . Outdoor alcohol service shall be in full compliance with all applicable regulations, including ABC regulations, as may be amended.

18.76.020 Architectural Review
(b) Applicability
(1) Exempt Projects. The following projects do not require architectural review:
. . .
(D) Parklets as defined in Chapter 18.04 and permitted per permit under Chapter

12.11, and signs that comply with the City’s adopted parklet standards affixed to parklets shall not require Architectural Review approval . Notwithstanding PAMC Sections 18.77.077 and 18.76.020, architectural review shall not be required for proposed outdoor eating and drinking service areas or signage affixed to such parklets.

SECTION 9. Section 16.20.100 (Prohibited Locations) of Chapter 16.20 (Signs) of Title 16 (Building Regulations) shall be amended as follows:

16.20.100 Prohibited Locations

Unless otherwise expressly provided in this chapter, all signs shall comply with the following location requirements:
(a) Public Property. No sign shall be placed on any public property , including but not limited to any city building, sidewalk, crosswalk, curb, street lamp post, hydrant, tree, shrub, tree stake or guard, railroad trestle, electric light or power or telephone or telegraph wire pole or wire appurtenance thereof or upon any fixture of the fire alarm system or upon any lighting system, street sign or traffic sign, except for signs that comply with the City’s Item 9
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adopted parklet standards affixed to parklets permitted via permit per PAMC Chapter

12.11. . . .

SECTION 10. Severability
If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional.

SECTION 11
. Environmental Review
The Council finds that the Ordinance is categorically exempt from CEQA under CEQA Guidelines Sections 15301 (existing facilities) and 15304(e) (minor temporary use of land having negligible or no permanent effects on the environment).

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SECTION 12. Effective Date and Enforcement
This Ordinance shall be effective on April 1, 2024 or 31 days after adoption, whichever is later.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

NOT PARTICIPATING:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Public Works

____________________________
Director of Planning & Development
Services

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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: October 2, 2023
Report #:2309-2033
TITLE
SECOND READING: Ordinance Approving a Development Agreement with SI 45, LLC, for the

14.65-acre Property at 200-404 Portage Avenue, 3040-3250 Park Boulevard, 3201-3225 Ash Street, and 270 Lambert Avenue (FIRST READING: September 12, 2023 PASSED 7-0)

BACKGROUND
This was heard by the City Council on September 12, 2023 for a first reading and was approved 7-0. No changes were made to the Ordinance; it is now before you for a second reading.

ATTACHMENTS
Attachment A: Draft Ordinance Approving the Development Agreement APPROVED BY:

Mahealani Ah Yun, Interim City Clerk
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Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Approving a Development Agreement with SI 45, LLC, for the 14.65-acre Property at 200-404 Portage Avenue, 3040-3250 Park Boulevard, 3201-3225 Ash Street, and 270 Lambert Avenue

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1
. Findings and Determinations

A. In order to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic costs of development, the Legislature of the State of California enacted Sections 65864 et seq. of the Government Code, which authorizes the City and any person holding a legal or equitable interest in the subject real property to enter into a development agreement, establishing certain development rights in the property, which is the subject of the development project application.

B. SI 45, LLC (“Applicant” or “Owner”) has a legal interest in certain real property located in the City consisting o f approximately 14.65 acres and commonly known as 200 -404 Portage Avenue, 3201-3225 Ash Street, 3040 -3250 Park Boulevard and 278 Lambert Street in Palo Alto, California (collectively, the “Property”).

C. At the conclusion of a City Council ad hoc committee process, Owner applied in the Fall of 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for Property.

D. The Project proposes to redevelop the Property by:
(i) Removing approximately 84,000 sf of the cannery building located at 200 -404 Portage Avenue to accommodate development of 74 townhomes. (ii) Restoring and rehabilitat ing the remaining portion of the c annery, retaining the same area of existing R&D uses in the c annery, and including the Retail/Display and Outdoor Seating Area;
(iii) Constructing a two -level parking garage to facilitate dedication of an approximately 3.25-acre parcel to the City;
(iv) Merging and re subdividing the Property into five parcels to facilitate the Project and dedication of the approximately 3.25-acre parcel;
(v) Retaining the existing office uses of the existing 3201-3225 Ash Street building; (vi) Retaining and conver ting the existing 3250 Park Boulevard b uilding from the current automotive uses to R&D use; and
(vii) Developing 74 Townhomes.

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E. The purpose of Government Code Sections 65864 to 65869.5 is to authorize municipalities, in their discretion, to establish certain development righ ts in real property for a period of years regardless of intervening changes in land use regulations. As authorized by Government Code Section 65865(c) , the City has adopted Resolution No. 7104, establishing procedures and requirements for consideration of development agreements in Palo Alto. This Development Agreement has been processed, considered, and executed in accordance with such procedures and requirements.

F. Notice of intention to consider this Development Agreement has been given pursuant to Government Code section 65867.

G. The City's Planning and Transportation Commission and City Council have given notice of intention to consider this Devel opment Agreement, have conducted public hearings thereon pursuant to Government Code section 65867 and City's Resolution No. 7104, and the City Council has found that the provisions of this Development Agreement are consistent with City's Comprehensive Plan, as amended.

H. The City has prepared an EIR for the Project and, through Resolution No. _______, certified the EIR, adopted a mitigation monitoring and reporting program, and made a statement of overriding considerations prior to the execution of this Agreement.

SECTION 2
. The City Council hereby approves the Development Agreement between the City of Palo Alto and SI 45, LLC, a copy of which is attached hereto as Exhibit "A ," and authorizes the Mayor to execute the Agreement on behalf of the City.

SECTION 3
. The City Clerk is directed to cause a copy of the development agreement to be recorded with the County Recorder not later than ten (10) days after it becomes effective.

SECTION 4. The City Council adopts this ordinance in accordance with the California Environmental Quality Act ("CEQA") findings adopted by Resolution No _______.

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SECTION 5. This ordinance shall be effective upon the thirty -first (31st) day after its adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSTENTIONS:

NOT PARTICIPATING:

ABSENT:

ATTEST: APPROVED:

__________________________ __________________________ City Clerk Mayor

__________________________ __________________________ Assistant City Attorney City Manager

__________________________
Director of Planning and Development Services

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EXHIBIT A

See Attachment D to staff report 2306-1663
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: October 2, 2023
Report #:2309-2034
TITLE
SECOND READING: Ordinance Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 340-404 Portage Avenue from Multiple Family Residential (RM-30) to PC Planned Community Zone (FIRST READING:

September 12, 2023 PASSED 7-0)

BACKGROUND
This was heard by the City Council on September 12, 2023 for a first reading and was approved 7-0. No changes were made to the Ordinance; it is now before you for a second reading.

ATTACHMENTS
Attachment A: Draft Ordinances for Planned Community Rezonings APPROVED BY:

Mahealani Ah Yun, Interim City Clerk
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Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 340-404 Portage Avenue from Multiple Family Residential (RM-30) to PC Planned Community Zone (PC-______) for the Partial Demolition and Historic Restoration/Rehabilitation of the Cannery Building for Research and Development Use

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre- screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for the 14.65 acre property at 200 -404 Portage Avenue, 3040 -3250 Park Boulevard, 3201-3225 Ash Street, and 270 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The Tentative Map associated with the Project, including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately

3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed uses on the other four (4) newly created parcels require Planned Community (PC) Zoning. (d) The Architectural Review associated with the Project, including conditions of approval, approved by Record of Land Use Action No. _______ include information on the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The approved Tentative Map and the Architectural Review shall be known collectively as the “Project Plans” and incorporated herein by reference. (f) This Ordinance is one of fi ve (5) PC Planned Community Ordinances associated with the Project, and sets forth the permitted uses, required development standards, and required public benefits applicable solely and exclusively for 340 -404 Portage Avenue (the “Subject Property”) as depicted and legally described on Exhibit A.

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(g) After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC-______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After a study sessions on December 15, 2022, January 19, 2022, and a public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The PTC, after a duly noticed public hearing held on July 12 and July 26, 2023, considered the Environmental Impact Report (“EIR”), then reviewed the Project Plans and this Ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions included in the Planned Community zone related to allo wable land uses and required development standards, and subject to provision of the public benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review.
(l) The Palo Alto City Council, after due consideration of th e proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project and this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section ( 6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehens ive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) as set forth in Record of Land Use Action No. _____, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

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SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of Subject Property from Multiple Family Residential (RM -30) to “PC Planned Community Zone _____”.

SECTION 3. Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a) Construction of a one-level parking garage;
(b) Demolition of approximately 84,000 square feet of the existing cannery building restoration, rehabilitation and maintenance of the remaining cannery building in accor dance with the Development Agreement and Architectural Review. (c) Construction of an approximately 2,600 square foot retail/interpretive display space within the remaining cannery building and an adjacent outdoor seating area (“Retail Area”) in accordance with the Development Agreement and Architectural Review.

SECTION 4. Land Uses
(a) The following land us es shall be permitted, subject to the limitations stated in Section 4(c):
(1) Research and Development as defined in Palo Alto Municipal Code section

18.04.030(a)(123) as of the Effective Date of this Ordinance and set forth in full below:
“Research and development” means a use engaged in the study, testing, engineering, product design, analysis and development of devices, products, processes, or services related to current or new technologies. Research and development may include limited manufacturing, fabricating, processing, assembling or storage of prototypes, devices, compounds, products or materials, or similar related activities, where such activities are incidental to research, development or evaluation. Examples of “research and development” uses include, but are not limited to, computer software and hardware firms, computer peripherals and related products, electronic research firms, biotechnical and biomedical firms, instrument analysis, genomics, robotics and pharmaceutical research laboratories, and related educational development.

Research and development may include the storage or use of hazardous materials in excess of the exempt quantities listed in Title 15 of the Municipal Code, or etiological (biological) agents up to and including Risk Group 3 or Bio Safety Level 3 classifications as defined by the National Institute of Health (NIH) Item 11
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or the Center for Disease Control (CDC). Higher classification levels of etiological (biological) agents are not allowed without express permission of the City Manager, Fire Chief, and Police Chief.

Related administrative uses such as finance, legal, human resources, management, marketing, sales, accounting, purchasing, or corporate offices; provisions of services to others on or off-site; and related educational uses may also be included provided they remain primarily supportive of the primary uses of “research and development” and are part of the same research and development firm.
(2) Retail service or Retail-like uses, except Hotels, Theaters, Commercial nurseries, Auto dealerships, and liquor stores.
(3) Multiple-family residential.
(4) Public facilities, including display of interpretive materials regarding the history of the historic cannery building and use.
(b) The following land uses shall be conditionally permitted, subject to the limitations stated in Section 4(c):
(1) Retail service or Retail-like uses excluded in Section 4(a)(2). (c) Special limitations on land uses include the following:
(1) A maximum of 140,174 square feet may be devoted to Research and Development (excluding an approximately 10,000 square foot exterior, covered area on the southwest corner of the building (“Covered Area”), which is currently used as an entry and outdoor seating area, parking, and screened storage, as depicted in Exhibit B. The Covered Area may remain in such use by the existing tenant as of the date of this Ordinance. Following termination of tenancy by the existing tenant, the Covered Area shall be converted such that it no longer meets the City’s then-existing definition of “Floor Area.”).
(2) The Retail Area may be occupied by Retail or Retail-like uses per Section 4 (a) and (b), above, or Public Facility uses only and shall be subject to a recordable covenant governing public access to the historic interpretive materials provided onsite pursuant to the terms of the Development Agreement.

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SECTION 5. Site Development Regulations and Development Schedule (a) Development Standards:

Development standards for the Subject Property shall be those as set forth in the Project Plans.
(b) Historic Maintenance Covenant:

As provided in the Development Agreement, t he Owner shall record a historic maintenance covenant, in a form acceptable to the City Attorney, to ensure maintenance of the Remaining Cannery in accordance with the Project Plans. (c) Parking and Loading Requirements:

The Owner shall provide parking and loading as set forth in the Project Plans. The parking requirements are adopted in consideration of a Transportation Demand Management (TDM) Plan, which is attached hereto and incorporated herein by reference. (d) Modifications to the Development Plan, Land Uses and Site Development Regulations:

Once the project has been constructed consistent with the approved Development Plan, any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan or the site development regulations contained in Section 5 (a) – (c) above shall require an amendment to this Planned Community zone, except as provided in the recorded Historic Maintenance Covenant and/or Project Plans . Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance. (e)
Development Schedule:

The project is required to include a Development Schedule pursuant to PAMC §18.38.100.

The approved Development Schedule is set forth in the Development Agreement.

SECTION 6. Public Benefits.
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The p ublic benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for Item 11
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Item 11: Staff Report
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compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

SECTION 7. Environmental Review
An EIR for the Project was prepared in accordance with the California Environmental Quality Act. The City Council adopted Resolution No. ____ certifying the adequacy of the EIR.

SECTION 8. Effective Date
This ordinance shall be effective on the thirty -first day after the date of its adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Planning and Development Services

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Item 11: Staff Report
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Exhibit A: Subject Property Plat and Legal Description
Exhibit B: Covered Area
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Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 200‐404 Portage/3040‐3200 Park Boulevard from Multiple Family Residential (RM‐30) to PC Planned Community Zone (PC‐______) for the Partial Demolition of the Cannery Building and Construction of Multifamily Residential Units.

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1.        Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre‐ screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval  of  (1)  a  Development  Agreement,  (2)  Comprehensive  Plan  Amendment,  (3)  Planned Community  Zoning  Ordinances,  (4) Tentative  Map(s),  and  (5)  Major  Architectural Review  (the “Project”) for the 14.65 acre property at 200‐404 Portage Avenue, 3040‐3250 Park Boulevard, 3201‐3225 Ash Street, and 270 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The  Tentative  Map  and  Final  Map  associated  with  the  Project,  including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately 3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed  uses  on  the  other  four  (4)  newly  created  parcels  require  Planned  Community  (PC) Zoning.
(d) The  Architectural  Review  associated  with  the  Project,  including  conditions  of approval,  approved  by  Record  of  Land  Use  Action  No.  _______  include  information  on  the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The  approved  Tentative  Map  and  the  Architectural  Review  shall  be  known collectively as the “Project Plans” and are incorporated herein by reference. (f) This Ordinance is one of five (5) PC Planned Community Ordinances associated with  the  Project,  and  sets  forth  the  permitted  uses,  required  development  standards,  and Item 11
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required public benefits applicable solely and exclusively for 200‐404 Portage/3040‐3200 Park Boulevard (the “Subject Property”) as depicted and legally described on Exhibit A. (g) After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC‐______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After  a  study  sessions  on  December  15,  2022,  January  19,  2022,  and  a  public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The  PTC, after  a  duly  noticed  public  hearing  held  on  July  12  and  July  26,  2023, considered the Environmental Impact Report (“EIR”), then reviewed the Project Plans and this Ordinance,  and  recommended  that  Section  18.08.040  (the  Zoning  Map)  of  the  Palo  Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions included in the Planned Community zone related to allowable land uses  and  required  development  standards,  and  subject  to  provision  of  the  public  benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review.
(l) The Palo Alto City Council, after due consideration of the proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project and this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed  for  the  site  are  of  such  characteristics  that  the  application  of  general  districts  or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section (6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Item 11
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Item 11: Staff Report
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Subject Property) as set forth in Record of Land Use Action No. ____, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

SECTION 2.        Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by  changing  the  zoning  of  Subject  Property  from  Multiple  Family  Residential  (RM‐30)  to  “PC Planned Community Zone _____”.

SECTION 3.        Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a)  Demolition  of  a  portion  of  the  existing  cannery  building,  as  described  in  more detail in the Development Agreement, to facilitate the construction of 74 market‐rate townhome units.

SECTION 4.        Land Uses
(a)  The following land uses shall be permitted:
(1) Multiple family residential.
(2) Accessory Facilities and uses customarily incidental to permitted uses (3) Home Occupations, when accessory to permitted residential uses. (4) Horticulture, Gardening, and Growing of food products for consumption by occupants of a site
SECTION 5.        Site Development Regulations and Development Schedule (a) Development Standards:

Development  standards  for  the  Subject  Property  shall  be  those  conforming  to  the Townhome Buildings set forth in the Project Plans.
(b) Parking and Loading Requirements:

The Owner shall provide parking and loading as set forth in the Project Plans. (c) Modifications to the Development Plan, Land Uses and Site Development Regulations:

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Once the project has been constructed consistent with the approved Development Plan, any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan or the site development regulations contained in Section 5 (a) – (b) above shall require an amendment to this Planned Community zone.  Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance. (d) Development Schedule:

The project is required to include a Development Schedule pursuant to PAMC §18.38.100.

The approved Development Schedule is set forth in the Development Agreement.

SECTION 6.        Public Benefits.
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC  Planned  Community  District  will  result  in  public  benefits  not  otherwise  attainable  by application of the regulations of general districts or combining districts. The public benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

SECTION 7.        Environmental Review
An  EIR  for  the  Project  was  prepared  in  accordance  with  the  California  Environmental Quality Act. The City Council adopted Resolution No. _______ certifying the adequacy of the EIR.

//

//

//

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SECTION 8.        Effective Date
This  ordinance  shall  be  effective  on  the  thirty‐first  day  after  the  date  of  its  adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________     ____________________________ City Clerk          Mayor

APPROVED AS TO FORM:      APPROVED:

____________________________     ____________________________ Assistant City Attorney      City Manager

____________________________
Director of
Planning and
Development Services

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Community Rezonings

Item 11: Staff Report
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Exhibit A: Subject Property Plat and Legal Description

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Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 3201‐3225 Ash Street from Multiple Family Residential (RM‐ 30) to PC Planned Community Zone (PC‐______) for the Maintenance of an Existing Office Building in Association with a Development Agreement.

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1.        Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre‐ screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval  of  (1)  a  Development  Agreement,  (2)  Comprehensive  Plan  Amendment,  (3)  Planned Community  Zoning  Ordinances,  (4) Tentative  Map(s),  and  (5)  Major  Architectural Review  (the “Project”) for the 14.65 acre property at 200‐404 Portage Avenue, 3040‐3250 Park Boulevard, 3201‐3225 Ash Street, and 270 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The  Tentative  Map  and  Final  Map  associated  with  the  Project,  including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately 3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed  uses  on  the  other  four  (4)  newly  created  parcels  require  Planned  Community  (PC) Zoning.
(d) The  Architectural  Review  associated  with  the  Project,  including  conditions  of approval,  approved  by  Record  of  Land  Use  Action  No.  _______  includes  information  on  the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The  approved  Tentative  Map  and  the  Architectural  Review  shall  be  known collectively as the “Project Plans” and are incorporated herein by reference. (f) This Ordinance is one of five (5) PC Planned Community Ordinances associated with  the  Project,  and  sets  forth  the  permitted  uses,  required  development  standards,  and required public benefits applicable solely and exclusively for 3201‐3225 Ash Street (the “Subject Property”) as depicted and legally described on Exhibit A.

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(g)  After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC‐______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After  a  study  sessions  on  December  15,  2022,  January  19,  2022,  and  a  public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The  PTC, after  a  duly  noticed  public  hearing  held  on  July  12  and  July  26,  2023, considered the Environmental Impact Report (“EIR”), then reviewed the Project Plans and this Ordinance,  and  recommended  that  Section  18.08.040  (the  Zoning  Map)  of  the  Palo  Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions included in the Planned Community zone related to allowable land uses  and  required  development  standards,  and  subject  to  provision  of  the  public  benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review.
(l) The Palo Alto City Council, after due consideration of the proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project and this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed  for  the  site  are  of  such  characteristics  that  the  application  of  general  districts  or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section (6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) as set forth in Record of Land Use Action No. _______, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

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SECTION 2.        Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by  changing  the  zoning  of  Subject  Property  from  Multiple  Family  Residential  (RM‐30)  to  “PC Planned Community Zone _____”.

SECTION 3.        Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a)  Retention of the existing building at 3201‐3225 Ash Street.

SECTION 4.        Land Uses
(a)  The  following  land  uses  shall  be  permitted,  subject  to  the  limitations  stated  in Section 4(c):
(1) Those uses permitted in the Research, Office and Limited Manufacturing (ROLM) District on the effective date of this ordinance, except manufacturing uses, subject to the regulations contained in Title 18 of the Palo Alto Municipal Code.
(2) Multiple‐family residential.
(b) The following land uses shall be conditionally permitted:
(1) Those uses conditionally permitted in ROLM District on the effective date of this ordinance.
(c) Special limitations on land uses include the following:
(1) A maximum of 4,707 square feet of the existing building may be devoted to uses permitted or conditionally permitted in the ROLM District, expressly including general office uses.

SECTION 5.        Site Development Regulations and Development Schedule (a) Development Standards:

Development standards for the Subject Property shall be those conforming to the 4,707 square  foot  building  3201‐3225  Ash  Street  existing  as  of  the  effective  date  of  this  ordinance, except  that  the  development  standards  for  a  multiple‐family  residential  use  shall  be  those applicable to the RM‐30 zone district.

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(b) Parking and Loading Requirements:

The Owner shall provide parking and loading as required by the Project Plans. The parking requirements  are  adopted  in  consideration  of  a  Transportation  Demand  Management  (TDM) Plan, which is incorporated herein by reference and a recorded off‐site parking covenant will be required with the City as a third‐party beneficiary.
(c) Modifications to the Development Plan, Land Uses and Site Development Regulations:

The  Development  Plan  does  not  contemplate  any  new  construction  on  the  Subject Property except as provided the Project Plans. Any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan or  the  site  development  regulations  contained  in  Section  5  (a)  –  (b)  above  shall  require  an amendment  to  this  Planned  Community  zone.   Any  use  not  specifically  permitted  by  this ordinance shall require an amendment to the PC ordinance. (d) Development Schedule:

The Project is required to include a Development Schedule pursuant to PAMC §18.38.100.

The approved Development Schedule is set forth in the Development Agreement.

SECTION 6.        Public Benefits and Monitoring
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The public benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant  shall  correct  such  conditions  in  not  more  than  90  days  from  notice  by  the  City.  If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment  will  schedule  review  of  the  project  before  the  Planning  and  Transportation Commission and Council to determine appropriate remedies, fines or other actions.

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Item 11
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Community Rezonings

Item 11: Staff Report
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SECTION 7.        Environmental Review
An  EIR  for  the  Project  was  prepared  in  accordance  with  the  California  Environmental Quality Act. The City Council adopted Resolution No. ____ certifying the adequacy of the EIR.

SECTION 8.        Effective Date
This  ordinance  shall  be  effective  on  the  thirty‐first  day  after  the  date  of  its  adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________     ____________________________ City Clerk          Mayor

APPROVED AS TO FORM:      APPROVED:

____________________________     ____________________________ Assistant City Attorney      City Manager

____________________________
Director of Planning
and
Development Services

Item 11
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Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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Exhibit A: Subject Property Plat and Legal Description

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Community Rezonings

Item 11: Staff Report
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Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 3250 Park Boulevard from Multiple Family Residential (RM‐ 30) to PC Planned Community Zone (PC‐______) for the Maintenance of an Existing Commercial Building in Association with a Development Agreement.

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1.        Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre‐ screening on August 1, 2022, SI  45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval  of  (1)  a  Development  Agreement,  (2)  Comprehensive  Plan  Amendment,  (3)  Planned Community  Zoning  Ordinances,  (4)  Tentative  Map(s),  and  (5)  Major  Architectural  Review  (the “Project”)  for  the  14.65  acre  property at  200‐404  Portage  Avenue,  3040‐3250  Park  Boulevard, 3201‐3225 Ash Street, and 270 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement  are  for  informational  purposes  only;  this  ordinance  does  not  affect  the  rights  and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The  Tentative  Map  and  Final  Map  associated  with  the  Project,  including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately 3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable  housing  project.  In  part  as  a  result  of  and  to  facilitate  this  dedication,  existing  and proposed  uses  on  the  other  four  (4)  newly  created  parcels  require  Planned  Community  (PC) Zoning.
(d) The  Architectural  Review  associated  with  the  Project,  including  conditions  of approval,  approved  by  Record  of  Land  Use  Action  No.  _______  includes  information  on  the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The  approved  Tentative  Map  and  the  Architectural  Review  shall  be  known collectively as the “Project Plans” and incorporated herein by reference. (f) This Ordinance is one of five (5) PC Planned Community Ordinances associated with  the  Project,  and  sets  forth  the  permitted  uses,  required  development  standards,  and required public benefits applicable solely and exclusively for 3250 Park Boulevard (the “Subject Property”) as depicted and legally described on Exhibit A.

Item 11
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Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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(g)  After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC‐______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its  meeting  of  May  25,  2023,  reviewed  the  Project  design  and  recommended  the  City  Council approve the Project, with certain recommended conditions and considerations. (j) After  a  study  sessions  on  December  15,  2022,  January  19,  2022,  and  a  public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The  PTC,  after  a  duly  noticed  public  hearing  held  July  12  and  July  26,  2023, considered the Environmental Impact Report (“EIR”), then reviewed the Project Plans and this Ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with  conditions  included  in  the  Planned  Community  zone  related  to  allowable  land  uses  and required development standards, and subject to provision of the public benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review. (l) The Palo Alto City Council, after due consideration of the proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project and this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed  for  the  site  are  of  such  characteristics  that  the  application  of  general  districts  or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section (6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) as set forth in Record of Land Use Action No. ________, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

Item 11
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Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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SECTION 2.        Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by  changing  the  zoning  of  Subject  Property  from  Multiple  Family  Residential  (RM‐30)  to  “PC Planned Community Zone _____”.

SECTION 3.        Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a)  Conversion of approximately 11,762 square feet of an existing building at 3250 Park Boulevard to Research and Development uses.

SECTION 4.        Land Uses
(a)  The  following  land  uses  shall  be  permitted,  subject  to  the  limitations  stated  in Section 4(b):
(1) Automotive Services.
(2) Research and Development.
(3) Multiple‐Family Residential.
(4) Accessory facilities and activities customarily associated with or essential to permitted uses, and operated incidental to the principal use. (b) Special limitations on land uses include the following:
(1) A maximum of 11,762 square feet within the existing building may be devoted to uses Automotive Services or Research and Development uses, including any accessory uses.

SECTION 5.        Site Development Regulations and Development Schedule (a) Development Standards:

Development standards for the Subject Property shall be those conforming to the 11,762 square foot building at 3250 Park Boulevard existing as of the effective date of this ordinance. (b) Parking and Loading Requirements:

The Owner shall provide off‐street parking and loading as set forth in the Project Plans.

The  parking  requirements  are  adopted  in  consideration  of  a  Transportation  Demand Management (TDM) Plan, which is attached hereto and incorporated herein by reference.

Item 11
Attachment A - Draft
Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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(c) Modifications to the Development Plan, Land Uses and Site Development Regulations:

The  Development  Plan  does  not  contemplate  any  new  construction  on  the  Subject Property.  Any  modifications  to  the  exterior  design  of  the  Development  Plan  or  any  new construction  not  specifically  permitted  by  the  Development  Plan  or  the  site  development regulations contained in Section 5 (a) – (b) above shall require an amendment to this Planned Community  zone.   Any  use  not  specifically  permitted  by  this  ordinance  shall  require  an amendment to the PC ordinance.
(d) Development Schedule:

The project is required to include a Development Schedule pursuant to PAMC §18.38.100.

The approved Development Schedule is set forth in the Development Agreement.

SECTION 6.        Public Benefits.
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC  Planned  Community  District  will  result  in  public  benefits  not  otherwise  attainable  by application of the regulations of general districts or combining districts. The public benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

SECTION 7.        Environmental Review
An  EIR  for  the  Project  was  prepared  in  accordance  with  the  California  Environmental Quality Act. The City Council adopted Resolution No. ____ certifying the adequacy of the EIR.

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Item 11
Attachment A - Draft
Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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SECTION 8.        Effective Date
This  ordinance  shall  be  effective  on  the  thirty‐first  day  after  the  date  of  its  adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________     ____________________________ City Clerk          Mayor

APPROVED AS TO FORM:      APPROVED:

____________________________     ____________________________ Assistant City Attorney      City Manager

____________________________
Director of
Planning and
Development Services

Item 11
Attachment A - Draft
Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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Exhibit A: Subject Property Plat and Legal Description

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Community Rezonings

Item 11: Staff Report
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Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 270 Lambert from Multiple Family Residential (RM-30) to PC Planned Community Zone (PC-______) for the Provision of a Park and Construction of Affordable Housing in Association with a Development Agreement.

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.
(a) At the conclusion of a City Council ad hoc committee process and City Council pre- screening on August 1, 2022, SI 45, LLC, (“the Owner”) applied in the Fall 2022 to the City for approval of (1) a Development Agreement, (2) Comprehensive Plan Amendment, (3) Planned Community Zoning Ordinances, (4) Tentative Map(s), and (5) Major Architectural Review (the “Project”) for the 14.65 acre property at 200 -404 Portage Avenue, 3040 -3250 Park Boulevard, 3201-3225 Ash Street, and 270 Lambert Avenue (the “Project Site”). (b) Unless context dictates otherwise, terms used in this Ordinance shall be defined and interpreted in a manner consistent with the Development Agreement adopted by Ordinance No. ______ (the “Development Agreement”). All references in this ordinance to the Development Agreement are for informational purposes only ; this ordinance does not affect the rights and obligations of the parties stated in the Development Agreement nor extend its applicability to the Subject Property beyond the terms stated in the Development Agreement. (c) The Tentative Map and Final Map associated with the Project, including exceptions and conditions of approval, approved by Record of Land Use Action No. _____ (the “Tentative Map”) will merge the Project Site and create five (5) new parcels, including dedication of approximately 3.25 acres of the Project Site to the City for use as parkland and as the site of an affordable housing project. In part as a result of and to facilitate this dedication, existing and proposed uses on the other four (4) newly created parcels require Planned Community (PC) Zoning.
(d) The Architectural Review associated with the Project, including conditions of approval, approved b y Record of Land Use Action No. _______ includes information on the existing and proposed improvements on the Project Site (the “Architectural Review”). (e) The approved Tentative Map and the Architectural Review shall be known collectively as the “Project Plans” and are incorporated herein by reference. (f) This Ordinance is one of five (5) PC Planned Community Ordinances associated with the Project, and sets forth the permitted uses, required development standards, and Item 11
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Ordinances for Planned
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Item 11: Staff Report
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required public benefits applicable solely and exclusively for 270 Lambert (the “Subject Property”), depicted and legally described on Exhibit A. (g) After study sessions on October 12, 2022 and October 26, 2022, the Planning and Transportation Commission (“PTC”), at its meeting of November 30, 2022, acted favorably on the Owner’s request for initiation of the Planned Community Zone process for the establishment of Planned Community Zone District No. PC-______.
(h) The Project was considered by the Public Art Commission (“PAC”) on January 19, 2023, and the Palo Alto Bicycle Advisory Committee (“PABAC”) on February 7, 2023 and June 6, 2023.
(i) After a study session on January 12, 2022, the Historic Review Board (“HRB”), at its meeting of May 25, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations. (j) After a study sessions on December 15, 2022, January 19, 2022, and a public hearing on April 6, 2023, the Architectural Review Board (‘ARB”), at its meeting of June 15, 2023, reviewed the Project design and recommended the City Council approve the Project, with certain recommended conditions and considerations.
(k) The PTC, after a duly noticed public hearing held on J uly 12 and July 26, 2023, considered the Environmental Impact Repor t (“EIR”), then reviewed the Project Plans and this Ordinance, and recommended that Section 18.08.040 (the Zoning Map) of the Palo Alto Municipal Code be amended to rezone the Subject Property to a new Planned Community zone, consistent with conditions inc luded in the Planned Community zone related to allowable land uses and required development standards, and subject to provision of the public benefits outlined in this ordinance and recommended approval of the Tentative Map and Architectural Review. (l) The Palo Alto City Council, after due consideration of the proposed Project, the analysis of the City staff, and the recommendations from the PAC, PABAC, HRB, ARB and PTC, certified the EIR and Mitigation Monitoring Program, and found that the proposed project a nd this Ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth.
(m) The Council finds that (1) the Subject Property is so situated, and the use or uses proposed for the site are of such characteristics that the application of general districts or combining districts will not provide sufficient flexibility to allow for the Project; (2) development of the Subject Property under the provisions of the PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts, as set forth in Section ( 6)(c) hereof; and (3) the use or uses permitted, and the site development regulations applicable within the proposed district are consistent with the Palo Alto Comprehensive Plan (Goals, Policies, and proposed designation of Mixed Use for the Subject Property) as set forth the Record of Land Use Action No. _____, and are compatible with existing and potential uses on adjoining sites or within the general vicinity.

Item 11
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Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of Subject Property from Multiple Family Residential (RM -30) to “PC Planned Community Zone _____”.

SECTION 3. Project Description.

The Project as a whole is described in the Development Agreement and the Project Plans.

With respect to the Subject Property, the project comprises the uses included in this Ordinance, depicted on the Project Plans, incorporated by reference, including the following components:
(a) Dedication of approximately 3.25 acres of land to the City for use as public park and for the development of affordable housing.

SECTION 4. Land Uses
(a) The following land uses shall be permitted
(1) Public Facilities
(2) Multiple-Family Residential
SECTION 5. Site Development Regulations and Development Schedule (a) Development Standards:

Approximately one acre of the Subject Property shall be utilized as the site for an affordable housing project; approximately 2.25 acres of the Subject Property shall be utilized as the site for a public park. The development standards for these uses shall be in conformance with such plans that are approved by the City Council for the Subject Property. (b) Modifications to the Development Plan, Land Uses and Site Development Regulations:

Once the project has been constructed consistent with the approved Development Plan, any modifications to the exterior design of the Development Plan or any new construction not specifically permitted by the Development Plan shall require an amendment to this Planned Community zone in accordance with Palo Alto Municipal Code Chapter 18.38. Any use not specifically permitted by this ordinance shall require an amendment to the PC ordinance. (c) Development Schedule:

The development schedule for the Subject Property shall be in accordance with future approvals for specific development plans.

Item 11
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Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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SECTION 6. Public Benefits.
(a) Public Benefits
Development of the Project Site under the provisions of the Development Agreement and PC Planned Community District will result in public benefits not otherwise attainable by application of the regulations of general districts or combining districts. The public benefits are provided by the Project as a whole and set forth in the Development Agreement. (b) Monitoring of Conditions and Public Benefits:

Not later than three (3) years following expiration of the Development Agreement and every three (3) years thereafter, the Owner shall request that the City review the for compliance with the PC district regulations and the conditions of the ordinance under which the district was created, as applicable only to the Subject Property. The applicant shall provide adequate funding to reimburse the City for these costs. If conditions or benefits are found deficient by staff, the applicant shall correct such conditions in not more than 90 days from notice by the City. If correction is not made within the prescribed timeframe, the Director of Planning and Community Environment will schedule review of the project before the Planning and Transportation Commission and Council to determine appropriate remedies, fines or other actions.

SECTION 7. Environmental Review
An EIR for the Project was prepared in accordance with the California Environmental Quality Act. The City Council adopted Resolution No. ____ certifying the adequacy of the EIR.

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Ordinances for Planned
Community Rezonings

Item 11: Staff Report
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SECTION 8. Effective Date
This ordinance shall be effective on the thirty -first day after the date of its adoption (second reading).

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Planning and
Development Services

Item 11
Attachment A - Draft
Ordinances for Planned
Community Rezonings

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BMR/PARK DEDICATION *NOT YET APPROVED*
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Exhibit A: Subject Property Plat and Legal Description

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Attachment A - Draft
Ordinances for Planned
Community Rezonings

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Community Services
Meeting Date: October 2, 2023
Report #:2307-1737
TITLE
Receive the Human Relation Commission’s Recommendations on the Evaluation and Celebration of Additional Dates to Advance Race & Equity, Including Through City Recognition and City Paid Holidays and Provide Direction to Staff on Further Actions. CEQA status – not a project.

RECOMMENDATION
Staff recommends that City Council:

1. Receive the Human Relation Commission’s recommendations responding to the Council referral on the evaluation and celebration of additional dates to Advance Race & Equity and provide direction to staff on the implementation of HRC recommendations including which to further pursue (subject to meet-and-confer as necessary).

2. Refer the proposed standard framework and procedure for considering City recognition of events, individuals, and celebrations to staff for further review and refinement.

EXECUTIVE SUMMARY
The Human Relations Commission is responding to a Council referral to consider ways to recognize key dates to advance race and equity. In doing so, they also created a standard framework and procedure when considering City recognition of events, individuals, and celebrations for the Council’s consideration.

Concurrent with the HRC review, the City Council has successfully completed multi-year contracts with all the City’s labor groups which included discussions surrounding recognition of key dates to advance race and equity. New contracts include a new provision, implemented in summer 2023, for a Day of Reflection/Historical Significance as a floating holiday for employees to be taken on any workday. Any changes to the City’s designated holidays would require a change to Palo Alto Municipal Code Section 2.08.100; a City holiday determines whether “municipal Item 12
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business” is to be suspended and would also require staff to meet and confer with the City’s employee bargaining units.

BACKGROUND
On March 7, 2022, Council considered a Colleagues’ Memo from Mayor Burt and Vice Mayor Kou titled Recognizing Key Dates to Advance Race & Equity 1 in which they recommended the local recognition and celebration of dates of historic significance that provide “an important opportunity to increase community awareness and for us to acknowledge the struggles and accomplishments of groups who have been fundamental to the development of American society.”
As the Human Relations Commission (HRC) has previously played a strong role in engaging on issues related to diversity in the community, it was suggested that the Commission give helpful input on how the dates identified in the Colleagues’ Memo could be celebrated, and the evaluation of the other possible holidays/remembrance days mentioned.

The Council provided the following direction in the motion that passed (7-0) on March 7, 2022:

MOTION: The City Council voted to formally recognize and celebrate the following dates:

A. Juneteenth, Cesar Chavez and Dolores Huerta Day, and add Indigenous Peoples’ Day as dates of historic significance, and May as Asian American Native Hawaiian/Pacific Islander Heritage Month;
B. Authorize Proclamations celebrating the above dates; C. Refer to the Human Relations Commission recommendations on how to best recognize and celebrate these dates (ones above); and
D. Ask the HRC to evaluate recognition of Holocaust Remembrance Day and Armenian Remembrance Day and evaluate if October 11th should be re-designated as Italian Heritage Day.
1 City Council, March 7, 2022; Agenda Item #7. https://www.cityofpaloalto.org/files/assets/public/agendas- minutes-reports/agendas-minutes/city-council-agendas-minutes/2022/20220307/20220307pccsmamendedfinal- linked.pdf
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The HRC discussed the Council referral at its meetings on June 9, 20222, August 11, 20223, and September 8, 20224, and used as background and discussion guide a report5 written by Human Services staff. The June meeting was a discussion to review the staff report and ask questions about the referral, and motions were entertained at the August 11th and September 8th, 2022 meetings. Specifically, the HRC was asked to consider:
•How best to recognize and celebrate the holidays listed in the Council motion •Evaluation of the addition of Holocaust Remembrance Day and Armenian Remembrance Day for local recognition
•Whether October 11th should be re-designated as ‘Italian Heritage Day’ (note: the HRC recommendation on this was reported to Council on September 12, 20226) At the August 11th meeting, the Commission discussed and made a recommendation related to the observance of the second Monday in October. The motion passed 2-1 with one commissioner absent.

HRC MOTION: The HRC recommends that the second Monday in October be recognized as Indigenous Peoples’ Day and Columbus Day to be as inclusive as possible.

The HRC’s recommendation on the observance of the second Monday in October was brought to the Council on September 12, 2022. There was a consensus by the Council that the name of the holiday should not include reference to Columbus Day, but that there continue to be a recognition of the contributions of Italian Americans in the community, therefore, a motion was passed to recognize the second Monday of October as “Indigenous People’s Day and Italian Heritage Day”7.
2 Human Relations Commission, June 9, 2022; Agenda Item #3. https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/human-relations- commission/2022/6.09/20220609ahrcr.pdf
3 Human Relations Commission, August 11, 2022; Agenda Item #4. https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/human-relations- commission/2022/8.11/8-11-22-agenda.pdf
4 Human Relations Commission, September 8, 2022; Agenda Item #5. https://www.cityofpaloalto.org/files/assets/public/community-services/human-relations- commission/agendas/2022/9-8-22-hrc-agenda.pdf
5 Human Relations Commission, June 9, 2022; Agenda Item #3. https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/human-relations- commission/2022/6.09/20220609cmrhrc3.pdf
6 City Council, September 12, 2022; Agenda Item #11; SR #14689. https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220912/20220912pccsm-amended-v2.pdf 7 City Council, September 12, 2022; Agenda Item #11; Action Minutes. https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220912/20220912amccsm.pdf
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The HRC resumed discussion and consideration of the remaining Council referrals at their September 8, 2022 meeting8. The Commission also reviewed a framework to present to Council for use when considering new holidays/observance days in the future and used this framework as a “test run” in the review and consideration of the Council referred dates of significance.

ANALYSIS
As summarized above, the HRC had multiple discussions related to the referral from Council. This work has followed two specific actions, 1) establishing a standard framework for when considering City recognition activities, and 2) specifically addressing the days of significance the Council requested direction on. This is a report back on the Commission‘s discussion and is organized into these two categories. Staff recommend that the Council receive this report and the Commission’s recommendations and provide direction to staff on desired next steps including, but not limited to, referring to staff further work on the framework and procedure as well as any further actions to direct staff’s work on recognition of specific days of significance.

HRC Proposed Standard Framework & Procedure When Considering City Recognition Activities In responding to the Council referral, the HRC felt that it was important to create and utilize a standard framework and procedure when considering City recognition of events, individuals, and celebrations to ensure a process that is easy to follow, fair and inclusive of our diverse population.

Chair Kaloma Smith stated that understanding, acknowledging, and celebrating events important to different sectors of the community is modeling growth through cultural competency.

The HRC is recommending that the Council consider the draft framework and request that staff refine it, create a visual “decision tree” to help individuals work through the process, and post on the City’s website.

The elements of the framework are outlined below.

Categories Description
Calls to Service (Service
Events, Days of Service
Celebrations of people or events that are a match to the promotion of service within the community
Times of Celebration Of people, events, and/or issues
Awareness Days/Months Bring forth awareness of social issues that affect the community, i.e., suicide prevention; and the awareness and honoring of the history, triumphs and struggles of different sectors of the community
Days of Remembrance City recognition of significant past events and/or persons Affinity Group Celebrations Recognition of different groups and their times of celebration 8 Human Relations Commission, September 8, 2022; Agenda Item #5. Action Minutes. https://www.cityofpaloalto.org/files/assets/public/community-services/human-relations- commission/minutes/2022/9-8-22-hrc-minutes.pdf
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Process for submission of consideration:
•Council Initiated
•Community Initiated
•Staff Initiated
•Commission Initiated
Types of Approval:
•Commission recommendation to Council
•Staff Approved
•Council Approved
Levels of Recognition/Celebration: *
Level Description
Base Level Proclamation/Certificate of Recognition
Mid-Level Medium level of staff/financial resources required (i.e., Co-sponsorship, Division/Department level assistance). Other local resources available/partners available.

High Level Significant level of staff/financial resources required. Multiple Departments involved
* It is important to note that the “level of recognition” refers to the level of city staff work/partners involvement in the recognition and does not correlate to the significance of the event.

Council Referral Requesting the Review of Days of Significance The City Council requested recommendations from the HRC on the following: Juneteenth, Cesar Chavez and Dolores Huerta Day, Indigenous Peoples’ Day and Italian Heritage Day, Asian American Native Hawaiian/Pacific Islander Heritage Month, Holocaust Remembrance Day, and Armenian Remembrance Day. The HRC’s recommendations to Council on the two specific referrals are discussed below and all passed 4-0 by the Commission. 1) Consideration of recognition of Holocaust Remembrance Day and Armenian Remembrance Day - The HRC discussion centered around comments from Councilmembers at their March 7, 2022 meeting on the importance of knowledge and education of important events in history.

MOTION: The HRC recommends to Council that it formally add Holocaust Remembrance Day and Armenian Remembrance Day for local recognition. 2) Consideration of how best to recognize and celebrate a series of Holidays, including Juneteenth, Cesar Chavez Day, Dolores Huerta Day, Indigenous Peoples’ Day, Asian American, Item 12
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Native Hawaiian, Pacific Islander (AANHPI) month, Holocaust Remembrance Day and Armenian Remembrance Day.

The HRC discussion centered around how best to recognize and celebrate the events and individuals below and included those in the recommendations. As mentioned above, the HRC utilized the framework referenced above as a “test run” in the review and consideration of the Council referred dates of significance below. In doing so, they discovered that events could fit into several categories and that the level of recognition could change based on the availability of internal and external resources.

In response to the HRC suggestion that Juneteenth and Cesar Chavez Days be paid days off for City employees, the HRC staff liaison shared that that the City was considering the concept of a floating holiday, so that employees could choose a day of historical significance to them.

Feedback from the HRC was that establishing certain days as paid days off, instead of letting staff choose, gives weight, meaning and awareness of a day and shows what a community values.

Attachment A provides a summary of the HRC’s “test run;” below is a table outlining the recommendation for recognition and celebration of the days requested.

Holiday/Day of
Significance
HRC Recommendation for Recognition & Celebration
Summarized
Juneteenth, June 19 •Add to the City’s paid holidays
•City join East Palo Alto in annual celebration event(s) Cesar Chavez, March 31
Dolores Huerta, April 10
•Add March 31 (state recognized day for Cesar Chavez) to the City‘s paid holidays and recognize both, Cesar Chavez Day and Dolores Huerta Day
•City to connect with local LatinX and women’s groups to support and create awareness of Cesar Chavez and Dolores Huerta Day
Indigenous Peoples’ Day,
2nd Monday October
•Recognize as both Columbus Day and Indigenous Peoples’ Day ➢Currently recognized as a City paid holiday and referred to as “Indigenous Peoples’ Day and Italian Heritage Day”, removing reference to Columbus Day as of 2022
•City to connect with local Indigenous groups to support existing activities and to create new ones, such as a land acknowledgement ceremony at City Hall
Asian American, Native
Hawaiian, Pacific Islander
(AANHPI) month, May
•City to connect with local AANHPI affinity groups to support existing activities and possibly create new ones
•Palo Alto Library and Palo Alto Council of Parent Teacher Associations (PTAC) also produce AANHPI awareness events Holocaust Remembrance
Day, January 27
City to connect with local Jewish affinity groups to support existing activities and possibly create new ones
Armenian Remembrance
Day, April 24
City to provide a proclamation
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This Council, in response to this report, may receive this report from the HRC, or receive the report and provide direction to staff to implement all or pieces of the recommended recognition and celebration activities. Impacts of these recommendations range from the ability to support through existing resources, to amendments to the City’s municipal code for changes to the City’s designated holidays and labor agreements with the City’s various unions. City holidays are designated in the Palo Alto Municipal Code Sections 2.08.100, and a designation as a City holiday determines if “municipal business” is to be suspended.

In addition, in parallel to the HRC’s discussion on this topic, City Council completed labor negotiations and approved a Day of Reflection/Historical Significance as a floating holiday for employees to be taken on any workday that is approved in advance by a supervisor. This offers flexibility and encourages employees to take a day to reflect and honor a significant event or cause that holds personal meaning to them. While it may align with historically recognized dates like Juneteenth or Dolores Huerta Day, it does not have to be limited to these specific occasions.

Any changes to the City’s designated holidays would require staff to meet and confer with the City’s employee bargaining units. Government organizations vary in the days designated as holidays and or number of “floater holidays” provided in employee’s total compensation. When looking at some nearby organizations such as City of Santa Clara, Milpitas, Redwood City, San Jose, San Mateo, and Santa Clara County, the number of designated holidays ranges from 10 days to 15 days. Palo Alto has 12. When one accounts for both designated holidays and floating holidays these same agencies range from 12 to 17 days and Palo Alto has 13. The State of California has 11 designated holidays and 1 floating holiday, and the federal government has 11 designated holidays.

FISCAL/RESOURCE IMPACT
The resource impact depends upon the costs associated with City initiated and led activities for the holidays listed above, but staff believes that these to be generally low in most instances.

Should the Council provide direction for the City to implement additional designated City holidays, staff estimates that total payroll on a holiday at current base wages and staffing level is approximately $635,000; it would be approximately $735,000 if fully staffed in all funds (approximately 67 percent of this would be General Fund). However, the actual impact of an additional holiday is the loss of a municipal business day plus the incremental financial cost for holiday-specific compensation, such as overtime stipulated in the City’s memoranda of agreement. In addition, City holidays typically suspend some on-street parking regulations as well as permitted construction and other noise-generating activities.

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STAKEHOLDER ENGAGEMENT
The item was discussed at the June 9, 2022, August 11, 2022 and September 8, 2022 HRC meetings. Agendas are posted online and sent to interested community members via Gov Delivery.

ENVIRONMENTAL REVIEW
This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably foreseeable indirect physical change in the environment.

ATTACHMENTS
Attachment A: HRC Recommendations via Lens of Proposed Standard Framework APPROVED BY:

Kristen O'Kane, Community Services Director
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ATTACHMENT A

Below is a summary of the HRC’s “test run” of the framework and procedures for when considering city recognition activities for the days of significance requested by the City Council.

Juneteenth (June 19)
Observed: June 19/Federal Holiday
Categories: Time of Celebration, Day of Remembrance, Awareness Day, Affinity Process: Community and Council initiated Type of Approval: Commission recommendation to Council Level: High Level

HRC Motion: The HRC recommends that Juneteenth be added to the City’s paid holidays and that the City join East Palo Alto in celebration event(s).

Cesar Chavez & Dolores Huerta Day
Observed: Cesar Chavez (March 31/State Holiday), Dolores Huerta (April 10) Categories: Call to Service, Affinity Group, Time of Celebration Process: Council Initiated
Type of Approval: Commission recommendation to Council Level: Mid-Level

HRC MOTION: The HRC recommends to Council that Cesar Chavez Day and Dolores Huerta Day be observed on March 31 (state recognized day for Cesar Chavez). To observe the date, the commission recommends for the city to connect with local LatinX and women’s groups to support and create awareness of Cesar Chavez and Dolores Huerta Day. Additionally, the commission recommends for the day to be added to the City’s paid holidays (Cesar Chavez Day is currently a paid holiday for the employees of Santa Clara County).

Indigenous Peoples’ Day
Observed: Second Monday in October (See note *) Categories: Day of Remembrance, Affinity Groups, Day of Awareness Process: Council initiated
Type of Approval: Commission recommended to Council Level: High Level

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Recommendations via
Lens of Proposed
Standard Framework

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*Note: The HRC recommended to Council that the second Monday in October be recognized as both Columbus Day and Indigenous Peoples’ Day, however; Council voted to recognize the second Monday in October as both Indigenous Peoples’ Day and Italian Heritage Day, removing reference to Columbus Day.

HRC MOTION: The HRC recommends to Council that Indigenous Peoples’ Day be recognized by the city through connecting with local indigenous groups to support existing activities and to create new ones, such as a land acknowledgement ceremony at City Hall.

Asian American, Native Hawaiian, Pacific Islander (AANHPI) month (May) Observed: May
Categories: Awareness, Affinity Group, Call to Service Process: Community Initiation, Council Initiated Type of Approval: Commission recommendation to Council Level: Mid-Level

HRC MOTION: The HRC recommends that Asian American, Native Hawaiian, Pacific Islander Month (AANHPI) be recognized by the city through connecting with local AANHPI affinity groups to support existing activities and to possibly create new ones. In addition to affinity groups, the Palo Alto Library and Palo Alto Council of Parent Teacher Associations (PTAC) also produce AANHPI awareness events.

Holocaust Remembrance Day
Observed: January 27
Categories: Day of Remembrance, Awareness Day Process: Council and community initiated Type of Approval: Commission recommendation
Level: Mid-Level

HRC MOTION: The HRC recommends that Holocaust Remembrance Day be recognized by the city through connecting with local Jewish affinity groups to support existing activities and to possibly create new ones.

Armenian Remembrance Day
Observed: April 24
Category: Day of Remembrance
Process: Council initiated
Type of Approval: Commission recommendation to Council Level: Base level

HRC MOTION: The HRC recommends that Armenian Remembrance Day be recognized by the City through a proclamation.

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Recommendations via
Lens of Proposed
Standard Framework

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: October 2, 2023
Report #:2306-1669
TITLE
Proposed Amendments to Palo Alto Municipal Code Title 18 (Zoning) Chapters 18.04 (Definitions), 18.10 (Low-Density Residential), 18.12 (R-1 Zones), 18.13 (Multiple Family Residential Zones),18.40 (General Standards and Exceptions), and 18.54 (Parking Facilities Design Standards) to Facilitate Implementation of Green Building Standards, Including Noise Standards and Placement of Obstructions Within Garages and Exterior Setback Encroachments for Electrification Equipment Such as Heat Pumps, Energy Storage Systems and Electric Vehicle Charging Stations, and to Title 9 (Public Peace, Morals and Safety) Chapter 9.10 (Noise) to Facilitate the Installation of Electrification Equipment for Residential Development as Recommended by the Planning and Transportation Commission. CEQA Status – Exempt under CEQA Guidelines sections 15061(b)(3) and 15301.

RECOMMENDATION
Staff and the Planning and Transportation Commission (PTC) recommend that the City Council adopt the attached draft ordinance (Attachment A) that makes changes to the Palo Alto Municipal Code to facilitate and streamline the installation of electrification equipment in residential neighborhoods.

EXECUTIVE SUMMARY
This report transmits an ordinance to facilitate and streamline the permitting and installation of electrification equipment, such as heat pump water heaters, electric vehicle chargers and energy storage systems. The ordinance has been reviewed and recommended for approval by the PTC. The proposed ordinance modifies the municipal code to allow electrification equipment to encroach defined distances into require yards, or setbacks, while maintaining a three foot (3’) clearance to side and rear property lines for access. Additionally, encroachments are allowed into required parking spaces. The noise ordinance is also amended to specify setbacks for noise producing equipment from property lines. If noise producing equipment conforms with the proposed requirements, it will be presumed compliant and would not require additional noise studies or analysis.

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The recommendations attempt to balance the desire to advance electrification equipment and reduce overall carbon emissions with the quiet enjoyment of residential neighborhoods. The City Council in its review may consider whether the standards should be adjusted for certain heat pump systems that use inverter technology that reduce the period of time for maximum noise generation associated with these systems, or direct staff to analyze this further and return with additional recommendations.

This item advances completion of the 2023 Council Priority Climate Change & the Natural Environment Objective “n”: Approve Municipal Code amendments for advancing S/CAP goals (specifically facilitate photovoltaic, energy storage system, electric vehicle charging station, and heat pump (water/furnace) installations).

BACKGROUND
The City has an expressed interest to reduce barriers that impeded the City’s sustainability and climate action goals. Electrification equipment, including heat pump systems for water heaters and heating, are seen as excellent opportunities to advance greenhouse gas reduction strategies. In 2022, the City Council authorized the Heat Pump Water Heater Pilot Program that promotes heat pump water heater installation in single-family homes through a turnkey installation service by a City-provided contractor, with a low up-front cost and an option for on- bill financing; or, customers may opt for the $2,300 rebate if they choose their own installation contractor. The program encourages the replacement of residential gas appliances such as water heaters with electric heat pump alternatives, and the program has a goal to install 1,000 of these appliances within a year.

In fall 2022, the City Council adopted the green building code and electrification equipment became mandatory for substantial remodels and new construction.

Zoning Code Amendments
To eliminate barriers to the installation of electrification equipment, staff proposes a variety of changes to the zoning code and noise ordinance.

Specifically, proposed changes to the zoning ordinance include:
•defining electrification equipment as: one or more devices that use electric energy to serve a dwelling unit’s needs for heating and cooling, water heating, cooking, and electric vehicle supply systems (EVSE), including ancillary equipment such as an electric panel, photovoltaic equipment, and energy storage systems that are deployed to support such devices;
•allows electrification equipment, including housing, screening, insulation, and bollards, to encroach into required minimum residential property setbacks as follows:

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oFront yard: two feet (2’) for electrical vehicle chargers and energy storage equipment (with allowances for a four feet front-yard encroachment where the front setback has a conforming setback)
oRear and interior side yards: any encroachment must maintain a three foot (3’) clearance from interior property lines
oCorner street side yard encroachment to provide a minimum 10 feet setback; •allows encroachments into a carport or garage parking space, with specified clearances; •adds a new exception to the Home Improvement Exception list for installation of electrification equipment; and,
•modifies requirements for equipment housing/noise suppression measures.

Adding the proposed flexibility to the zoning standards facilitates the installation of electrification equipment particularly in older housing stock that may not have conforming setbacks or where heating equipment is located in less convenient or ideal locations. New construction would also be able to take advantage of the proposed ordinance.

Noise Ordinance Amendment
Noise producing electrification equipment is subject to the noise ordinance. The current noise ordinance regulates sound by setting a permissible noise limit in residential zones of 6 decibels over the local ambient noise levels and defines ‘local ambient’. It limits noise levels caused by stationary noise sources. The existing noise ordinance requires that ambient noise levels first be established through noise measurements, and then, defines an exceedance if noise levels would exceed ambient noise levels by more than 6 decibels. To reduce time delays and costs associated with obtaining a third party noise study to demonstrate compliance with the City’s noise ordinance, staff recommends establishing specific standards that, if complied with, would deem the equipment compliant with local noise regulations. Specifically, for areas east of the Foothill Expressway, the ordinance establishes a 50 decibel or less threshold at the property line as the compliance standard. Louder equipment can be installed but would require a greater setback from the property line so the noise could dissipate before reaching the property line.

The ordinance also includes a provision that allows louder noise producing equipment to be located closer to the property line if noise reduction strategies are used and compliance with the noise standard is verified with a noise study. For areas west of the Foothill Expressway, the ordinance establishes a property line noise threshold of 40 decibels. Throughout the City, if the ambient noise levels at nighttime are greater than these thresholds, the ambient noise level would be the property line standard used.

The attached ordinance includes a table that sets forth minimum setbacks (reflected in feet as the unit of measure) for noise producing equipment based on how loud the manufacturers specifications list the decibel rating for the specific unit to be installed.

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Noise producing equipment can be as close as three feet (3’) to the property line. Such equipment for accessory dwelling units and junior ADUs may be placed even closer to an interior property line, following Council’s adoption in June of the most recent ADU unit ordinance (Ord. 5585). Electrification equipment that exclusively serves an ADU/JADU may be located anywhere on the site except in the front yard setback and not within a 10-foot street- side setback of a corner lot. However, Ordinance 5585 required this equipment for ADUs and JADUs to meet the noise ordinance.

Planning and Transportation Commission (PTC)
In late 2022, staff prepared and presented zoning code modifications to the PTC, which recommended approval of the proposed electrification equipment encroachments into required parking and setbacks. More recently, the PTC considered proposed changes to the noise ordinance, which is not specifically within the Commission’s authority, but was requested by the planning and development services director because of the relevance to the proposed electrification equipment encroachments. On balance, the Commission supported the recommended changes but also deliberated on whether there was a need for two different thresholds dividing the rural foothills area and the more suburban parts of the City. The Commission requested this boundary, which was not fully defined, be better delineated for the City Council. As referenced above, that delineation is now defined as the Foothill expressway.

The Commission also suggested the City’s home improvement exception regulations be utilized to address certain exceedances in the noise, for electrification equipment only, subject to that discretionary review process and supporting noise reports. This too has been incorporated into the attached ordinance.

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Additional information provided to the PTC is available online and through the embedded links in the footnotes below, including: two staff reports1 and PTC meeting videos2, links to the December 14, 2022 PTC meeting summary minutes3 and verbatim minutes4, and a link to the August 30, 2023 PTC summary minutes.5
One additional note, the noise table shown above has been slightly modified from the PTC’s review to remove decimal points for some setbacks. Identifying setbacks in increments less than one foot implies a level of precision that staff does not believe is warranted. Accordingly, setbacks have been rounded to the nearest whole foot since the PTC’s review. Staff made other non-substantive changes to the ordinance to ensure internal consistency in the provisions, slightly revised the home improvement exception language to better capture the PTC’s intent and other minor adjustments.

ANALYSIS
Staff’s intent with the proposed ordinance is to streamline application processing to facilitate the installation of electrification equipment that advances the City’s sustainability and climate reduction goals. The proposed ordinance is anticipated to provide sufficient relief to residents looking to install such equipment and provides reasonable relief with minimal impacts to other city interests established in the zoning code. The proposed ordinance, however, cannot anticipate every scenario that may apply to a particular property owner and if an owner is unable to meet the more flexible standards, a new location may need to be found to install the electrification equipment. If this proves too costly for a resident to relocate related equipment, a resident may opt out of transitioning to a more sustainable alternative. As noted above, the home improvement exception added to the ordinance based on the PTC’s recommendation would provide flexibility to address some situations.
1 PTC staff reports of August 30, 2023 www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/agendas-minutes/planning-and-transportation-commission/2023/ptc-8.30-muni-code-electrification.pdf and December 14, 2022 www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas- minutes/planning-and-transportation-commission/2022/ptc-12.14.2022-title-18-zoning.pdf 2 Videos of August 30, 2023 PTC meeting https://midpenmedia.org/planning-and-transportation-commission/ and December 14, 2022 PTC meeting https://midpenmedia.org/planning-transportation-commission-63- 12142022/
3 Summary minutes of PTC meeting December 14, 2022 www.cityofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/agendas-minutes/planning-and-transportation-commission/2022/ptc-12.14.2022-summary- minutes.pdf
4 Verbatim minutes of December 14, 2022 www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/agendas-minutes/planning-and-transportation-commission/2022/ptc-12.14.2022-verbatim-minutes.pdf 5 Summary minutes for August 30, 2023 PTC meeting: www.cityofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/agendas-minutes/planning-and-transportation-commission/2023/ptc-8.30.2023-summary.pdf Item 13
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Heat Pump Inverter Technology
The proposed decibel levels are believed to be relatively conservative in order to ensure noise producing equipment is not disruptive to adjacent neighbors. To this end, the presumed compliance decibel levels of 50 and 40 decibels east and west of the Foothill Expressway respectively, were derived based on previous noise studies prepared by the City’s consultant over several years and measured throughout the City. The proposed standards are also informed by noise standards established by nearby jurisdictions. Moreover, because the ambient noise levels are quietest at night, residents may be more sensitive to noise producing equipment during these times.

Staff has received correspondence from residents and other individuals interested in electrification efforts who are concerned that the proposed recommendations are too restrictive for heat pump systems using inverter technology.

Staff is aware that some heat pumps use variable speed motors, sometimes called inverter- based heat pumps or inverter compressors. While staff’s expertise with this technology is limited, our understanding is that heat pumps differ from classic heat pumps, which run at full speed for a period of time until heating or cooling task is done, then turn off. Inverter-based heat pumps vary the voltage to a motor to allow it to run at different speeds. This means that an inverter-based heat pump can run for a long time at a low speed, maintaining a more consistent temperature. This also reduces the energy use. Inverter-based heat pumps tend to be less noisy than regular heat pumps because they do not need to run the motor at full speed.

Staff can investigate this technology further and return with recommendations that address this type of equipment, or based on the public testimony, including input from the City’s noise consultant, make adjustments to the noise ordinance at the public hearing.

It is worth noting that a change in noise of three decibels is audible but almost imperceptible. A change of five decibels is clearly noticeable and a change of ten decibels from a benchmark measurement represents a 1000 percent change as noise is measured logarithmically.

Based on the foregoing, the City Council may want to weigh its interest to advance electrification equipment with the anticipated noise impacts it may generate to adjacent residential neighbors. How individuals respond to noise and how noise travels are unique considerations to each person and setting. Staff does not recommend a significant departure from the recommended ordinance but recognizes there may be opportunities from some limited adjustments that may not have significant consequences for an adjacent neighbor.

FISCAL/RESOURCE IMPACT
There were no significant fiscal or resource impacts; costs associated with hiring a noise consultant were paid for through the department’s budget.

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POLICY IMPLICATIONS
The proposed ordinance advances the City’s interest to facilitate the installation of heat pumps for water heaters and furnaces, electric vehicle chargers and energy storage systems by reducing regulatory barriers that may impede progress in this regard. The proposed changes are relatively modest but are anticipated to provide meaningful relief in most circumstances.

The City Council may want to consider if adjustments to the proposed noise ordinance are warranted to address emerging efficient technology that may reduce the duration of noise generated from certain electrification equipment compared to more traditional systems.

STAKEHOLDER ENGAGEMENT
Staff received correspondence from stakeholders during the 2022 and 2023 PTC reviews of the draft ordinance. These emails are attached to this report (Attachment B).

ENVIRONMENTAL REVIEW
The proposed ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, the ordinance is exempt under CEQA Guideline 15061(b)(3) because it can be seen with certainty that the proposed modifications, which retain existing noise standards in Chapter 9.10, will not result in a significant impact on the physical environment. Additionally, the activity regulated by the ordinance is exempt under CEQA Guideline 15301 because it involves the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, and mechanical equipment, involving negligible or no expansion of existing or former uses.

ATTACHMENTS
Attachment A: Draft Ordinance
Attachment B: Public Correspondence
APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 13
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1 Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Palo Alto Municipal Code (PAMC) Title 18 (Zoning), Chapters 18.04 (Definitions), 18.10 (Low-Density Residential),

18.12 (R-1, Single Family Residence District), 18.13 (Multifamily Residential Zones), 18.40 (General Standards and Exceptions), and 18.54 (Parking Facilities Design Standards) and Title 9 (Public Peace, Morals, and Safety), Chapter 9.10 (Noise) to Facilitate Adoption of Electrification Equipment Required by the 2022 Green Building Code and Local Amendments The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) is amended to read as follows (additions underlined, deletions struck-through, and omissions noted with bracketed ellipses):

18.04.030 Definitions
(a) Throughout this title the following words and phrases shall have the meanings ascribed in this section.
[. . .]
(49) (reserved) “Electrification Equipment” means one or more devices that use electric energy to serve a dwelling unit’s needs for heating and cooling, water heating, cooking, and electric vehicle supply equipment (EVSE)charging, including. In addition, ancillary equipment such as an electrical panel(s), inverters, photovoltaic equipment, and energy storage systems that are deployed to support such devices shall be considered Electrification Equipment. [. . .]
SECTION 2. Section 18.10.040 (Site Development Standards) of Chapter 18.10 (RE, R2, RMD Low-Density Residential District) of Title 18 (Zoning) of the PAMC is amended to read as follows (additions underlined, deletions struck-through, and omissions noted with bracketed ellipses):

18.10.040 Development Standards
[. . .]
(h) Location of Noise-Producing Equipment and Electrification Equipment (1) Electrification Equipment and any associated housing, screening, insulation, or bollards necessary to enable compliance with the applicable regulations, including Chapter 9.10 of this the Palo Alto Municipal Code, shall provide a minimum three foot interior side and rear yard setback and a minimum ten Item 13
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1 foot street sideyard setback. Except as otherwise provided in this Title for EVSE and energy storage systems, Electrification Equipment shall not be located in the required front yard setback and shall at all times provide sufficient clearance for fire safety purposes. All other noise-producing equipment, such as air conditioners, pool equipment, gas powered generators, commercial kitchen fans, and similar service equipment shall be located outside of the front, rear and side yard setbacks. Such equipment may, however, be located up to 6 feet into the street sideyard setback. All such noise-producing equipment, including Electrification Equipment, shall be insulated and housed, except where doing so would interfere with the operation of the equipment. that tThe Planning Director may also permit installation without housing and insulation, provided the equipment is located within the building envelope and where that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure compliance with the City’s Noise Ordinance at the nearest property line. Any replacement of such equipment shall conform to this section where feasible; replacement of equipment for which permits were obtained prior to these restrictions is allowable in the same location, provided the replacement equipment complies with the City’s noise ordinance. All service equipment must meet the City Noise Ordinance incomply with Chapter 9.10 of this codethe Palo Alto Municipal Code. (2) Where existing improvements comply with front setback requirements, EVSE may encroach up to four feet into the required front setback. Where existing improvements do not comply with front setback requirements, EVSE may encroach into the otherwise required front setback by two feet beyond the existing improvement. Energy storage systems and associated equipment and safety bollards may encroach two feet into a front yard setback as authorized in 18.40.060. EVSE and energy storage systems and associated equipment and safety bollards may be located within required on-site parking spaces, as further described in PAMC Chapter 18.54 Section

18.54.020.
(3) The Planning Director may publish administrative regulations to further implement this subsection (h), including a list of equipment or technologies that may presumptively be installed without housing and insulation due to noise generation below applicable maximums.
[. . .]
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1 SECTION 3. Sections 18.12.040 (Site Development Standards), 18.12.050 (Permitted Encroachments, Projections, and Exceptions), and Section 18.12.120 (Home Improvement Exception) of Chapter 18.12 (R-1 Single- Family Residential District) of Title 18 (Zoning) of the PAMC are amended to read as follows (additions underlined, deletions struck-through, and omissions noted with bracketed ellipses):

18.12.040 Site Development Standards
[. . .]
(l) Location of Noise-Producing Equipment and Electrification Equipment (1) Electrification Equipment and any associated housing, screening, insulation, or bollards necessary to enable compliance with the applicable regulations, including Chapter 9.10 of this the Palo Alto Municipal Code, shall provide a minimum three foot interior side and rear yard setback and a minimum ten foot street sideyard setback. Except as otherwise provided in this Title for EVSE and energy storage systems, Electrification Equipment shall not be located in the required front yard setback and shall at all times provide sufficient clearance for fire safety purposes. All other noise-producing equipment, such as air conditioners, pool equipment, gas powered generators, commercial kitchen fans, and similar service equipment shall be located outside of the front, rear and side yard setbacks. Such equipment may, however, be located up to 6 feet into the street sideyard setback. All such noise-producing equipment, including Electrification Equipment, shall be insulated and housed, except where doing so would interfere with the recommended operation of the equipment. that tThe Planning Director may also permit installation without housing and insulation, provided the equipment is located within the building envelope and where that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure compliance with the City’s Noise Ordinance at the nearest property line. Any replacement of such equipment shall conform to this section where feasible, except the Director may allow replacement of existing equipment in a non-complying location, if such equipment had prior building permit(s), with equipment that meets the City’s Noise Ordinance. All service equipment must meet the City Noise Ordinance incomply with Chapter 9.10 of this codethe Palo Alto Municipal Code.

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1 (2) Where existing improvements comply with front setback requirements, EVSE may encroach up to four feet into the required front setback. Where existing improvements do not comply with front setback requirements, EVSE may encroach into the otherwise required front setback by two feet beyond the existing improvement. Energy storage systems and associated equipment and safety bollards may encroach two feet into a front yard setback as authorized in 18.40.060. EVSE and energy storage systems and associated equipment and safety bollards may be located within required on-site parking spaces, as further described in PAMC Chapter 18.54 Section

18.54.020.
(3) The Planning Director may publish administrative regulations to further implement this subsection (l), including a list of equipment or technologies that may presumptively be installed without housing and insulation due to noise generation below applicable maximums.
[. . .]

18.12.050 Permitted Encroachments, Projections and Exceptions [. . .]
(a) Setback/Yard Encroachments and Projections
[. . .]
(3) Allowed Projections
[. . .]
(F) Pools, Spas, and Hot Tubs and Associated Electrification Equipment (i) Pools, spas, and hot tubs may extend into a required rear yard a distance not to exceed fourteen feet, provided that a minimum setback of six feet from the property line shall be maintained. (ii) No swimming pool, hot tub, spa, or similar accessory facility shall be located in any portion of a required front or street side yard.

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1 (iii) Electrification Equipment for pools, spas, hot tubs, and swimming pools subject thatto meeting the standards set forth in Table 1 of Section 9.10.030.
[. . .]
//

18.12.120 Home Improvement Exceptions
[. . .]
(b) Applicability
A home improvement exception may be granted as part of a proposed improvement or addition to an existing single-family or two-family structure, or accessory structure, or both, in the RE, R-1, RMD, or R-2 district, as limited in subsection (c). A home improvement exception may be granted as described in subsections (1) through (16) (14) of subsection (c), but may not exceed the limits set forth in those subsections. In order to qualify for a home improvement exception, the project must retain at least 75% of the existing exterior walls, including exterior finishes such as siding or cladding.
(c) Limits of Home Improvement Exception
A home improvement exception may be granted only for one or more of the following, not to exceed the specified limits:
[. . .]
(16) To allow for installation of Electrification Equipment within the setbacks provided in this Title or that deviates from the o noise ordinance standards exceed the noise ordinance standards set forth in Section 9.10.030(c). [. . .]
SECTION 4. Section 18.13.040 (Development Standards) of Chapter 18.13 (Multiple Family Residential Zones – RM20, RM30, RM40) of Title 18 (Zoning) of the PAMC is amended to read as follows (additions underlined, deletions struck-through, and omissions noted with bracketed ellipses):

18.13.040 Development Standards
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1 [. . .]
(b) Setbacks, Daylight Planes and Height - Additional Requirements and Exceptions (1) Setbacks
(A) Required parking spaces shall not be located in a required front yard, nor in the first ten feet (10') adjoining the street property line of a required street side yard.
(B) Projections into yards are permitted only to the extent allowed by Section

18.40.070 of this codeCode.
(C) Electrification Equipment and any associated housing, screening, insulation, or bollards necessary to enable compliance with the applicable regulations, including Chapter 9.10 of this the Palo Alto Municipal Code, shall provide a minimum three foot interior side and rear yard setback and a minimum ten foot street sideyard setback. Except as otherwise provided in this Title for EVSE and energy storage systems, Electrification Equipment shall not be located in the required front yard setback and shall at all times provide sufficient clearance for fire safety purposes. All Electrification Equipment must meet comply with Section the City Noise Ordinance in Chapter 9.10.030 of this codethe Palo Alto Municipal Code. (D) Where existing improvements comply with front setback requirements, EVSE may encroach up to four feet into the required front setback.

Where existing improvements do not comply with front setback requirements, EVSE may encroach into the otherwise required front setback by two feet beyond the existing improvement. Energy storage systems and associated equipment and safety bollards may encroach two feet into a front yard setback as authorized in 18.40.060. (E) The Planning Director may publish administrative regulations to further implement subsection (b)(1)(C), including a list of equipment or technologies that may presumptively be installed within setbacks without housing and insulation due to noise generation below applicable maximums.
[. . .]
SECTION 5. Sections 18.40.060 (Permitted Uses and Facilities in Required Yards) of Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of PAMC is amended to read as follows (additions underlined, deletions struck-through, and omissions noted with bracketed ellipses):

18.40.060 Permitted Uses and Facilities in Required Yards Except as otherwise prescribed by district regulations or other provisions of this title, use and development of required yards shall be limited to the following:

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1 [. . .]
(f) Electrification Equipment for residential uses only: When installed in a required yard, Electrification Equipment and any associated housing, screening, insulation, or bollards necessary to enable compliance with the applicable regulations, including Chapter 9.10 of this the Palo Alto Municipal Code, shall provide a minimum three foot interior side and rear yard setback and a minimum ten foot street sideyard setback.

Except as otherwise provided in this Title for EVSE and energy storage systems, Electrification Equipment shall not be located in the required front yard setback and shall at all times provide sufficient clearance for fire safety purposes. EVSE, energy storage systems, and safety bollards may encroach two feet into a 20-foot standard front setback.

SECTION 6. Section 18.40.260 (Visual Screening and Landscaping) of Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of PAMC is amended to read as follows (additions underlined, deletions struck-through, and omissions noted with bracketed ellipses):

18.40.260 Visual Screening and Landscaping
[. . .]
(b) Requirements
[. . .]
(2) For all project types:
(A) All areas not covered by structures, service yards, walkways, driveways, and parking spaces shall be landscaped with ground cover, shrubs, and/or trees. (B) Rooftop equipment shall be screened by a parapet or enclosure. Rooftop equipment or rooftop equipment enclosures shall be set back at least 20 feet from the building edge or a minimum of 100 feet from the property line, whichever is closer. Roof vents, flues and other protrusions through the roof of any building or structure shall be obscured from ground-level public view (when viewed from the sidewalk on the opposite side of a street), by a roof screen or proper placement. See Section 18.40.090 (height limit exceptions) for further restrictions. (C) A minimum ten-foot planting and screening strip shall be provided adjacent to any façade abutting a low density residential district (R-1, R-2, or RMD) or abutting railroad tracks.
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1 when viewed from the abutting opposite sidewalk, except for residentially used EVSE and energy storage systems and associated bollards. [. . .]
SECTION 7. Section 18.54.020 (Vehicle Parking Facilities) of Chapter 18.54 (Parking) of Title 18 (Zoning) of PAMC is amended to read as follows (additions underlined, deletions struck-through, and omissions noted with bracketed ellipses):

18.54.020 Vehicle Parking Facilities
(a) Parking Facility Design
Parking facilities shall be designed in accordance with the following regulations:
(1) Requirements for dimensions of parking facilities at, above, and below grade are contained in this section and in Figures 1-6 and Tables 3-6 of Section 18.54.070. (2) Stalls and aisles shall be designed such that columns, walls, or other obstructions do not interfere with normal vehicle parking maneuvers. All required stall and aisle widths shall be designed to be clear of such obstructions except as otherwise provided in subsection (a)(4) below.
(3) The required stall widths shown in Table 3 of Section 18.54.070 shall be increased by

0.5 foot for any stall located immediately adjacent to a wall, whether on one or both sides. The director may require that the required stall widths be increased by 0.5 foot for any stall located immediately adjacent to a post, where such post limits turning movements into or out of the stall.
(4) For property owners or tenants seeking to install EVSE, the required stall widths shown in Table 3 of Section 18.54.070 may be reduced by no more than eighteen inches below the code-required minimum dimensions in order to accommodate EVSE or associated electrical utility equipment. For parking lots and garages other than for one- and two-family use, tThis reduction may be applied to 10% of the total required parking stalls, or two stalls, whichever is greater. The director may approve a reduction in width for a greater number of stalls through a director’s adjustment pursuant to Section 18.52.050. For one- and two-family residential garages and carports, 18-inch reductions are allowed for both stall width and depth to enable Electrification Equipment and protective bollards, as long as (i) the reduced width is not continuous along the length side of the stall, to provide a six-foot length near the middle of the stall for opening two vehicular side doors, and (ii) the proposed garage has an interior clearance depth of 20 feet in compliance with 18.54.020 (b)(2) or an existing substandard garage has a Item 13
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1 depth of at least 19 feet-six inches. For a garage depth less than 19 feet-six inches but greater than 18 feet, such equipment may be installed on the back wall of the garage at a location at least four feet above the finished floor.
[. . .]
(b) Off-Street Parking Stalls
(1) Each off-street parking stall shall consist of a rectangular area not less than eight and one-half (8.5) feet wide by seventeen and one-half (17.5) feet long (uni-class stall), or as otherwise prescribed for angled parking by Table 3 in Section 18.54.070. (2) Garages and carports for single-family and two-family development shall provide a minimum interior clearance of ten (10) feet wide by twenty (20) feet long for a single car and a minimum of twenty (20) feet wide by twenty (20) feet long for two cars to allow sufficient clearance, except as otherwise provided in subsection (a)(4) above.

SECTION 8. Section 9.10.030 (Residential Property Noise Limits) of Chapter 9.10 (Noise) of Title 9 (Public Peace, Morals, and Safety) of the Palo Alto Municipal Code is amended to read as follows (additions underlined, deletions struck-through, and omissions noted with bracketed ellipses):

9.10.030 Residential property noise limits.
(a) No person shall produce, suffer or allow to be produced by any machine, animal or device, or any combination of same, on residential property, a noise level more than six dB above the local ambient at any point outside of the property plane, except as modified in (c) below.
(b) No person shall produce, suffer or allow to be produced by any machine, animal, or device, or any combination of same, on multi-family residential property, a noise level more than six dB above the local ambient three feet from any wall, floor, or ceiling inside any dwelling unit on the same property, when the windows and doors of the dwelling unit are closed, except within the dwelling unit in which the noise source or sources may be located. (c) Electrification Equipment as defined in Section 18.04.030 (a)(49) shall be deemed to comply with this Section 9.10.030 if the equipment complies with the maximum equipment sound levels and is placed at the setbacks established in Table 1 - Setback Requirements.

Electrification Equipment that complies with Table 1 shall not require additional sound mitigation. As an alternative to compliance with Table 1, a property owner may utilize the limits set forth in subsections (a) and (b) of this Section 9.10.030 if those provisions would be more permissive.

Table 1 – Setback Requirements
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1 Equipment Sound Level
(≤dBA) in 40 dBA limit area
West of Foothill
BlvdExpressway.

Equipment Sound Level
(≤dBA) in 50 dBA limit area
East of Foothill
BlvdExpressway.

Minimum Setback from
Receiving Property Line (≥ft.)
39 49 3
40 50 3
41 51 4
42 52 4
43 53 5
44 54 5
45 55 6
46 56 6
47 57 7
48 58 8
49 59 9
50 60 10
51 61 11
52 62 12
53 63 13
54 64 15
55 65 17
56 66 19
57 67 20
58 68 24
59 69 27
60 70 30
SECTION 9. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.

SECTION 10. The Council finds that the adoption of this ordinance is exempt from the provisions of the California Environmental Quality Act pursuant to CEQA Guideline sections 15061(b)(3) because it can be seen with certainty that the proposed modifications, which retain existing noise standards in Chapter 9.10, will not result in a significant impact on the physical environment. Additionally, the activity regulated by the ordinance is exempt under CEQA Guideline 15301 because it involves the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, and mechanical equipment, involving negligible or no expansion of existing or former uses.

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1 SECTION 11. This ordinance shall be effective on the thirty-first date after the date of its adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

NOT PARTICIPATING:

ATTEST:

____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ Senior Asst.Assistant City Attorney City Manager ____________________________
Director of Planning & Community
Environment
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From: Lait, Jonathan
To: French, Amy
Subject: FW: Palo Alto Ordinance pertaining to Noise and Electrification Date: Thursday, September 14, 2023 2:01:01 PM
Attachments: image003.png
image004.png

JONATHAN LAIT
Director
Planning and Development Department
(650) 329-2676 | [email protected]
www.cityofpaloalto.org

From: Pat Burt <[email protected]>
Sent: Thursday, September 14, 2023 11:56 AM
To: Abendschein, Jonathan <[email protected]>; Eggleston, Brad <[email protected]>; Lait, Jonathan <[email protected]>; Luong, Christine <[email protected]>
Subject: Fwd: Palo Alto Ordinance pertaining to Noise and Electrification

CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking on links.

Jon,
The note below from Glen Garfunkel raise some issues that I don’t know how well our proposed ordinance changes address.

Pat

---------- Forwarded message ---------
From: Debbie Mytels <[email protected]
>
Date: Thu, Sep 14, 2023 at 11:31 AM
Subject: Re: Palo Alto Ordinance pertaining to Noise and Electrification To: Glen Garfunkel <[email protected]
>
CC: Tom Kabat <[email protected]>, Adam Sweeney <[email protected]>, Pat Burt <[email protected]>, Jonathan Abendschein <[email protected]>

Thanks, Glen, for your thuoghtful comments on this. It’s good to have a person with your technical background involved in the Climate Reality leaderrship locally! I don’t think that many of us who are advocates for electrification have thought about this down to this level, so it’s helpful to hear your comments.

Personally, I don’t want to do anything to hinder the adoption of heat pumps… but, from what I know, there are some noise concerns. I’m wondering if it might be possible to place more insulation around the noisier type models? Could you add something like that to your recommendations?

I’d suggest that you and Adam and Tom write up your comments and send them to the members of the City Council:

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[email protected]

Our former mayor, Pat Burt, is still on the Council and he is both technically savvy and a strong advocate for electricifaction, so I would send him a special, separate message: [email protected]

Jonathan Abendschein, the Associate Director of Utilities, is also a strong advocate for electrification, and he might also be able to make some modifications to the staff proposal if sent to him in time. You can reach him at [email protected]

I’ve cc:d both Pat and Jonathan so they will know what this is about when you contract them.

— Debbie

On Sep 14, 2023, at 12:07 AM, Glen Garfunkel <[email protected] > wrote:

Hi FFB-SV folks
Who is following the new Palo Alto ordinance proposal for electrification equipment, especially as it pertains to Heat Pump(HP) placement and noise requirements? Is anyone opposing (or supporting) the ordinance? I believe it goes before City Council 10-2, so very soon.

Our interpretation is that the noise requirements are very restrictive, too restrictive. In particular, they make no accommodations for inverter heat pumps which tend to operate quieter than conventional on/off heat pumps. Our take on the current proposal is that the noise requirement will prevent many homeowners(with small or medium size lots) from placing HP’s on the side of their property, which would otherwise be a preferred location, especially for suitcase footrprint HP (to avoid placement in back or front yards). We worry it may slow down adoption of HP’s. While we understand noise concerns, we think the noise requirements may be too tight, and there should be special accommodations for inverter HPs.

We would like to know what is the thinking or planning from FFB-SV side, or PA community, concerning these noise ordinance aspects?
file:///Users/glengarfunkel/Downloads/mini-
packet_Planning%20&%20Transportation%20Commission%20Regular%20Meeting_202309140211216.pdf Thx
Glen Garfunkel
San Jose (Climate Reality - Silicon Valley)

Debbie Mytels
2824 Louis Road
Palo Alto,CA 94303
650-759-0888
[email protected]
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From: Glen Garfunkel
To: Lait, Jonathan; French, Amy; Klicheva, Madina
Cc: Benabente, Julie; Adam Sweeney
Subject: Fwd: Noise Ordinance for San Jose
Date: Wednesday, September 13, 2023 10:03:01 PM
Attachments: image003.png
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Samsung AM060MXMDCH+AA.pdf
Mitzubishi MXZ-3C24NA3-U1.pdf
LG LMU240HV.pdf
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Hi Jonathan, and Amy,
Thank you for sharing the consultants feedback.

The consultants feedback below directly state they are only concerned with this worst case noise scenario, and aren’t considering that this is not commonly occurring for inverter heat pumps.

There needs to be a suitable balance between the electrification goals, and worst case noise concerns.

Cabin noise levels inside a car at normal speeds are typically in the ballpark of 65-70dB(A) or higher. We experience these levels everyday.

With our mild climate in the Bay Area, inverter heat pumps(HP) rarely need to operate at full capacity.

Putting a limit of 53db(A) for a 4foot offset from the property line, for an inverter HP, that may operate at full capacity(53dBA) for only a few hours or tens of hours per year, is too conservative.

This heat pump study, for a cold climate condition for a particular heat pump, found a seasonal average noise level 5dB below the maximum noise.
https://heatpumpingtechnologies.org/annex51/wp-content/uploads/sites/59/2021/10/iea-hpt- annex-51-d23.pdf
We suggest for inverter HPs, the criteria be relaxed at least 5dB(A); so an inverter HP of 58dB(A) max noise would readily qualify for placement up to 4 foot from the property line.

There is another concern:the ordinance documents also note "All noise producing electrification equipment will need to maintain a 36-inch separation between structures .”
Is this part of the proposed ordinance? Other than one comment, there is no discussion of this issue in the rest of the document.

Between the side setback requirement and this possible 36” separation requirement, most common houses could never accommodate a HP in the side of their house. (Also, 36” is well beyond the minimum wall separation mfg spec for many heat pumps.) Side-of-house placement for suitcase footprint style heat pumps is desirable for many home owners with common lot sizes, and accommodating this placement will facilitate adoption of heat pumps.

We strongly encourage Palo Alto to relax the proposed noise requirements to strike a more reasonable balance between low occurrence noise issues and electrification goals, especially Item 13
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for inverter type heat pumps.

Sincerely
Glen Garfunkel
Climate Reality Project - Silicon Valley Project
Begin forwarded message:

From: "French, Amy" <[email protected]>
Subject: FW: Noise Ordinance for San Jose
Date: September 7, 2023 at 5:26:01 PM PDT
To: Glen Garfunkel <[email protected]
>
Here is the message that had come back August 23rd in case we didn’t forward to you previously.

From: Michael S. Thill <[email protected]>
Sent: Wednesday, August 23, 2023 10:38 AM
To: Lait, Jonathan <[email protected]>; French, Amy <[email protected]>; Klicheva, Madina <[email protected]> Cc: Adam Petersen <[email protected]> <[email protected]> Subject: RE: Noise Ordinance for San Jose

Hi Jonathan:

There were several examples of inverter (or variable speed) heat pumps in our data set. I have attached a few examples for your reference.

In any case, the maximum noise level output of the equipment, as reported by the manufacturer, should be used for comparative purposes with the noise ordinance because, theoretically, the equipment could run at maximum capacity when heating or cooling. This is the approach taken by our firm when predicting noise levels in order to conservatively assess the noise.

With regard to the comment, “[ If(!)
the dbA value represents the 100% capacity noise for inverter heat-pumps, then we would suggest to consider a relaxation of the dBA requirements for inverter heat-pumps.]”, I feel that the City has already relaxed the noise limits quite a bit by allowing noise levels 8 dB above the local ambient.

“Heat pump condenser units shall be allowed to emit noise at 8dB above the local ambient noise level if the unit(s) are set back at least 10 feet from a rear or interior side property line.”

I was of the impression that the 40/50 dBA limits proposed would be the final limit and no additional exceedances would be allowed. In my opinion, allowing 48-58 dBA is too loud at night, so I would suggest revisiting this adjustment.

I am happy to discuss this further at your convenience.

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Michael

Michael S. Thill
Illingworth & Rodkin, Inc.
429 E. Cotati Avenue
Cotati, CA 94931
(Main) 707.794.0400 x 110
(Direct) 707.753.4568
(Fax) 707.794.0405

From: Lait, Jonathan <[email protected]> Sent: Tuesday, August 22, 2023 6:56 PM
To: Michael S. Thill <[email protected]>; French, Amy <[email protected]>; Klicheva, Madina <[email protected]> Cc: Adam Petersen <[email protected]> <[email protected]> Subject: FW: Noise Ordinance for San Jose

Michael,

I’m not sure if Amy already sent this to you, but either way - please see the message below and let us know your take. @Klicheva, Madina can help set up a meeting if not easily addressed via email.

JONATHAN LAIT
Director
Planning and Development Department
(650) 329-2676 | [email protected]
www.cityofpaloalto.org

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From: Glen Garfunkel <[email protected]>
Sent: Tuesday, August 22, 2023 12:02 PM
To: French, Amy <[email protected]>; Klicheva, Madina <[email protected]>; Lait, Jonathan <[email protected]> Cc: Julie Benabente <[email protected]>; Adam Sweeney <[email protected]>
Subject: Re: Noise Ordinance for San Jose

Hi Jonathan, Madina (, Amy)

Thanks for the links and informing us of the status.

The proposed ordinance makes no mention of modern inverter Heat Pumps (variable speed compressors and fans), which tend to be quieter than traditional heat pumps.

As you may know, traditional(non-inverter) heat pumps are either 100% on(noisy), or off. Inverter heat pumps can modulate from ~30% to 100% of capacity, and rarely operation at 100%, which is the noisiest condition.

I was unable to resolve if the standard dBA measured noise metric (and the proposed ordinance), applies to the noise measured at 100% of capacity for inverter heat pumps, or whether it includes some correction to fairly compare inverter vs non-inverter types.

Also, the provided dBA raw data, for a given model, often lists a range of dBA values(4dB or more, sometimes). Sometime the range corresponds to heating vs cooling mode. For other models, it is unclear what the range represents. (It’s possible the range represents minimum to maximum modulation of the compressors & fans.)

Would it be possible for you please help clarify these details, so we can ascertain how inverter heat pumps are accounted for, in the ordinance?

[ If(!)
the dbA value represents the 100% capacity noise for inverter heat-pumps, then we would suggest to consider a relaxation of the dBA requirements for inverter heat-pumps.]

Thank you for your consideration.

Regards
Glen Garfunkel
Climate Reality Project - Silicon Valley Project

On Aug 11, 2023, at 5:32 PM, Adam Sweeney <[email protected] > wrote:

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Hi Amy and all,

Thank you very much for pointing us to the proposal.

I have one question for you. In the package there is a document from the Planning and Development Services department titled "Residential Electrification Equipment: Noise Standards and Placement Guidelines". On the second page of that document, just under Table 1, it says, "All noise producing electrification equipment will need to maintain a 36" separation between structures." Does that mean that a heat pump in a side yard will have to be 36" from the wall of the house? Requiring that will almost double the amount of side yard space required for many units. Do you know where this requirement comes from? I can't find any other mention of it in the docs. I apologize in advance if I'm just confused and misreading things.

Sincerely,

Adam Sweeney

On Thu, Aug 10, 2023 at 7:26 AM French, Amy <[email protected] > wrote:

The draft ordinance is embedded in the staff report for last nights commission - the staff report is embedded in the agenda https://www.cityofpaloalto.org/files/assets/public/agendas- minutes-reports/agendas-minutes/planning-and-transportation-commission/2023/ptc-

8.09-public-agenda2.pdf

Note that the commission meeting on the first two items went to almost midnight last night and this item on noise producing electrification equipment was continued to the august 30 commission date.

Get Outlook for iOS
From: Glen Garfunkel <[email protected]>
Sent: Thursday, August 10, 2023 12:18:29 AM
To: French, Amy <[email protected]>
Cc: Klicheva, Madina <[email protected]>; Adam Sweeney <[email protected]>; Lait, Jonathan <[email protected]>; Julie Allingham <[email protected]>
Subject: Re: Noise Ordinance for San Jose

Hello Amy
Can you please share the new proposed noise and setback ordinance document, which I assume is available now?
I could not locate it online.

Thanks
Glen Garfunkel
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On Jul 21, 2023, at 11:56 AM, French, Amy <[email protected]> wrote:

August 2nd publication.
-----Original Message-----
From: Glen Garfunkel <[email protected]>
Sent: Thursday, July 20, 2023 11:33 PM
To: French, Amy <[email protected]
>
Cc: Klicheva, Madina <[email protected]>; Adam Sweeney <[email protected]>; Lait, Jonathan <[email protected]>; Julie Allingham <[email protected]>
Subject: Re: Noise Ordinance for San Jose
Amy, Madina,
Thanks for the updates.

So then around Aug 9th would a copy of the staff report be available? Thanks
Glen Garfunkel
On Jul 19, 2023, at 5:18 PM, French, Amy <[email protected]> wrote:

Apologies Mr. Garfunkel,
We had a major public hearing item continued from July 12 to July 26. We are pushing the ordinance to August 9th for the Commission's consideration. Therefore, September is going to be the target for Council consideration of the ordinance.
-----Original Message-----
From: Klicheva, Madina <[email protected] >
Sent: Wednesday, July 19, 2023 3:34 PM
To: Glen Garfunkel <[email protected]>
Cc: Adam Sweeney <[email protected]>; Lait, Jonathan <[email protected]>; French, Amy <[email protected]> Subject: RE: Noise Ordinance for San Jose
Hi Glen!
Thank you for your email. The staff report for the July 26th Planning & Transportation Commission Item 13
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is currently being completed by Amy French. Additionally, we want to present the ordinance to Council on August 21.

Thank you!
Madina
-----Original Message-----
From: Glen Garfunkel <[email protected]
>
Sent: Wednesday, July 19, 2023 11:38 AM
To: Lait, Jonathan <[email protected]>
Cc: Klicheva, Madina <[email protected]>; Adam Sweeney <[email protected]>
Subject: Re: Noise Ordinance for San Jose
Hi Jonathan
Any updates?
Is there a draft ready perhaps?
thx
Glen Garfunkel
Climate Reality Project - Silicon Valley Chapter
On May 30, 2023, at 7:02 PM, Lait, Jonathan <[email protected]> wrote:

Hi Glen.

Thanks for checking in.

We've made some progress - the outstanding issue for us was updates to our noise ordinance.

That proved a little more complicated but I think we are heading down a path of allowing noise producing equipment to encroach up to four feet from a side or rear property line and identify and establish a standard of presumptive compliance with the noise ordinance is located 15 feet away and meeting a certain db level. Still sorting through some details with our noise consultant. I expect our planning commission to review the change in late July; Council in August or September.

JONATHAN LAIT
Director
Planning and Development Department
(650) 329-2676 | [email protected]
www.cityofpaloalto.org
-----Original Message-----
From: Glen Garfunkel <[email protected]
>
Sent: Monday, May 29, 2023 11:58 PM
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To: Lait, Jonathan <[email protected]>
Cc: Klicheva, Madina <[email protected]> Subject: Re: Noise Ordinance for San Jose
Hi Jonathan
Last we spoke I got impression the new ordinances document (including setbacks, for heat pumps, etc) was to be rewritten before mid-summer. Is there a draft or finished version available yet? thx
Glen Garfunkel
Climate Reality Project - SV Chapter
On Feb 27, 2023, at 7:22 PM, Lait, Jonathan <[email protected] > wrote:

Sorry for the delayed response - I was out last week. @Klicheva, Madina can help us find to time to talk. We don't have much at the moment but happy to share where we think this is heading.

Take care,
Jonathan

JONATHAN LAIT
Director
Planning and Development Department
(650) 329-2676 | [email protected]
www.cityofpaloalto.org
-----Original Message-----
From: Glen Garfunkel <[email protected]
>
Sent: Thursday, February 23, 2023 12:36 AM
To: Lait, Jonathan <[email protected]>
Cc: Adam Sweeney <[email protected]>
Subject: Noise Ordinance for San Jose
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________________________________
Hi Jonathan,
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We are interested in revisiting our noise ordinances in San Jose (for electrification projects), and would like to get a better understanding of Palo Alto’s current plans or direction or thinking.

Would you have time for a short phone call on this? (10-15minutes may be enough.) Thanks
Glen Garfunkel
Climate Reality Project - Silicon Valley Chapter San Jose Community Energy Advocates

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Public Comments to Date (11-30-22)

Hamilton Hitchings

1. Please allow noise making equipment for electrification within 4 feet of the property line. This includes mini split heat pumps for HVAC (Heating and Air Conditioning) and Hot Water Heaters, both of which are normally much quieter than air conditioning units. Setbacks currently range from six to twenty feet. While six feet would be fine for me, I am aware of many other houses where they would need a four foot setback to allow them to fit in their side yard. For ADUs noise making equipment is allowed within 4 feet of the property line, including loud air conditioners. I recommend a maximum within the setback. I want to get the Mitsubishi 5-zone minisplit, which is known to be one of the quietest and it has a maximum dBA of 58 but others, especially American brands are louder and also bigger since our house is only 1,800 square feet.

2. Add a minimum dba noise level for equipment to qualify as noise making, for example 50 dbA. 50 dba is considered faint noise or moderate rainfall. I am considering a SANCO2 heat pump which is about twice as expensive as a normal hybrid water heater but has an outside heat pump separate from the water tank and is rated at a maximum dba of only 39. That’s the same noise level as a normal refrigerator. However, because there is no minimum dba noise level I was told by the planning department that the minimum noise level was not in the code so no exceptions would be made.

3. For the purposes of determining noise setbacks, allow houses on corner lots (like mine) to use the side of their house where their front door is as the front of their house. Current Palo Alto municipal code mandates the front of your house is the shorter side of the property, regardless of where your front door actually is. My HVAC installer said he has never run into another city in the Bay Area which enforced such a rule. In my case this means I need a twenty foot setback from the side of my house where I would put the equipment. Since my house was extended in the 1960s before this code change was made, it completely eliminates the only area on my property I would consider putting this equipment.

Another member of the public emailed the Commission comments for the August 31, 2022, PTC meeting, viewable as the first comment here:
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas- minutes/planning-and-transportation-commission/2022/ptc-08.25.2022-public-comments.pdf The comments address heat pumps, outdoor unit fan noise, enclosing and insulating.

Heat Pumps:

Converting from gas to electricity for space heating and water heating requires electrification.

The Building Code has a very strong incentive for this electrification to be efficient, and the most cost-effective approach is to use a heat pump for heating and avoid the use of electric resistance- only heating systems (glorified space heaters). Additionally, Palo Alto Utilities has a strong incentive for electrification to be efficient to mi tigate the extra load on existing electrical transmission and distribution.

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Outdoor unit Fan noise:

Heat pumps require heat exchange between the inside and the outside, and so by far, the most typical approach is to use an outdoor unit with a fan to draw heat from or dump heat into. And these fans make noise. With the advent of variable speed heat pumps, newer modern units make a lot less noise because they use larger outside units and run at part load. Fan noise is a similar squared law to speed (fan mo ving at 800 RPM makes ~¼ of the noise of a fan moving at 1600 RPM).

Enclosing and Insulating:

While fully enclosing and insulating the outdoor condensing unit inside a box will work for acoustics, it will completely defeat the purpose of the condensing unit to communicate with the outside air. It is important the ordinance account for both noise attenuation while not significantly diminishing the heat exchange performance (and manufacturers’ warranties).

The policy question at hand is whether to allow otherwise quiet equipment (as is required by the current ordinance) within the 4-foot setback. In my experience, the current noise ordinance is a disincentive for designers to electrify ADUs. It’s currently feasible to build an ADU with a gas heater and gas water heater and be done with it. That way, the designer can place the ADU against the back corner of the lot along the ADU setbacks and not worry about where to put outdoor equipment. While putting outdoor heat pump equipment is technically possible to do within the current setbacks and in a more exposed place—e.g. by the front and side doors to the ADU or elsewhere in the front, back or side yards, this design option is… not popular.

A revision to the ordinance to allow for heat pumps in the setback would be a strong step towards promoting electrification. This issue with heat pumps does and will extend to Main Residences and Pools, but the proposed ordinance does not. I believe it is reasonable to expect that a well - crafted and performance-based noise ordinance could allow building electrification in new (and more importantly… existing) buildings while not antagonizing neighbors and ambient noise.

Other municipalities have long dealt with this with regard to air -conditioning (see Newport Beach’s Condenser Noise Analysis), so I don’t believe Palo Alto has to reinvent the wheel. Through my conversations with planning staff, they have not expressed enthusiasm for such a performance-based code, or that’s my perception. I’m not convinced that they have fully explored the option and understand the bureaucratic impact on their work and project review.

That said, they have a lot of work/review to do currently, so it’s important to consider the time required to review a performance-based ordinance and who would do that review. I don’t believe that such bureaucratic issues are a reasonable excuse not to pursue as aggressive of a stance as possible to render Palo Alto’s natural gas system obsolete as soon as possible.”

Richard Halsted
Late 2021 we were going to put in an electric heat pump system (and heat pump water heater) to replace the existing gas appliances in our house, but we ran into an issue with the setback rules for the outdoor heat pump unit. For whatever reason, our house is zoned for eight -foot setbacks on the side but where the units would have been placed was six feet from the fence. For Item 13
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these very low decibel units, whether the unit is six feet or eight feet from the fence makes no difference in the noise generated. Every contractor who came t hrough to bid on the project agreed it was "stupid" but that was the Palo Alto rules so eventually our project was scrapped (for now). We asked our Palo Alto architect friends and they said that everyone knows these setbacks are no longer relevant and that the rules will be changed at some point. Hopefully that some point is now.

If you really want people to replace their gas appliances with electric heat pump units, old rules need to be updated now. To our understanding, ADU rules have shorter setbacks for all sorts of aspects including things like heat pump units. And as we live on East Meadow, which for some reason is a "special" setback street, looking at setback maps houses behind us have only six feet side setbacks, but we have eight feet side setbacks. No bureaucratic reasoning would convince me as to why that difference exists in the first place.

And as a final comment, none of this makes any economic sense as the cost to put in a heat pump system is several times that of just replacing our gas furnace (which we may need to do this winter) regardless of any bill passed in Washington. You need to make it easy to do this, not the usual Palo Alto runaround for permitting and inspections as we have experienced on several jobs on our house over the years.

Luke Morton
Leaky Gas - Methane Leakage
To meet the City’s (and the world’s) climate goals, it is imperative to strand current natural gas infrastructure. This is not just because natural gas combustion results in CO2 in direct emissions, but far more important, the natural gas system leaks. Recent studies (including those by Eric Lebel at Stanford) have measured a methane leakage rate from just stoves 0.8 -1.3%. Other gas appliances also leak, and the natural gas system itself also leaks—you might note the slight smell of mercaptan at the Alma/Oregon Expressway overpass. Given that natural gas has a Global Warming Potential 80 times that of CO2, this is a BIG DEAL.

Whereas we once thought that gas was ‘clean’ burning, there is some consensus buil ding that gas is as bad as coal for global warming (see
https://www.science.org/content/article/natural-
gas-could-warm-planet-much-coal-short-term).

Heat Pumps:

Converting from gas to electricity for space heating and water heating requires electrification.

The Building Code has a very strong incentive for this electrification to be efficient, and the most cost-effective approach is to use a heat pump for heating and avoid the use of electric resistance- only heating systems (glorified space heaters).

Additionally, Palo Alto Utilities has a strong incentive for electrification to be efficient to mitigate the extra load on existing electrical transmission and distribution.

Outdoor unit Fan noise:

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Heat pumps require heat exchange between the inside and the outside, and so by far, the most typical approach is to use an outdoor unit with a fan to draw heat from or dump heat into. And these fans make noise. With the advent of variable speed heat pumps, newer modern units make a lot less noise because they use larger outside units and run at part load. Fan noise is a similar squared law to speed (fan moving at 800 RPM makes ~¼ of the noise of a fan movin g at 1600 RPM).

Enclosing and Insulating:

While fully enclosing and insulating the outdoor condensing unit inside a box will work for acoustics, it will completely defeat the purpose of the condensing unit to communicate with the outside air. It is impo rtant the ordinance account for both noise attenuation while not significantly diminishing the heat exchange performance (and manufacturers’ warranties).

The policy question at hand is whether to allow otherwise quiet equipment (as is required by the current ordinance) within the 4-foot setback. In my experience, the current noise ordinance is a disincentive for designers to electrify ADUs. It’s currently feasible to build an ADU with a gas heater and gas water heater and be done with it. That way, the de signer can place the ADU against the back corner of the lot along the ADU setbacks and not worry about where to put outdoor equipment. While putting outdoor heat pump equipment is technically possible to do within the current setbacks and in a more exposed place—e.g. by the front and side doors to the ADU or elsewhere in the front, back or side yards, this design option is… not popular.

A revision to the ordinance to allow for heat pumps in the setback would be a strong step towards promoting electrification. This issue with heat pumps does and will extend to Main Residences and Pools, but the proposed ordinance does not. I believe it is reasonable to expect that a well - crafted and performance-based noise ordinance could allow building electrification in n ew (and more importantly… existing) buildings while not antagonizing neighbors and ambient noise.

Other municipalities have long dealt with this with regard to air -conditioning (see Newport Beach’s Condenser Noise Analysis), so I don’t believe Palo Alto has to reinvent the wheel. Through my conversations with planning staff, they have not expressed enthusiasm for such a performance-based code, or that’s my perception. I’m not convinced that they have fully explored the option and understand the bureaucratic impact on their work and project review.

That said, they have a lot of work/review to do currently, so it’s important to consider the time required to review a performance-based ordinance and who would do that review. I don’t believe that such bureaucratic issues are a reasonable excuse not to pursue as aggressive of a stance as possible to render Palo Alto’s natural gas system obsolete as soon as possible.

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From: French, Amy
To: "Hamilton Hitchings"
Cc: Lait, Jonathan; Hoyt, George
Subject: RE: Discuss Electrification Equipment Ordinance - Hamilton"s input see email 9:18 at 7:54 PM Date: Wednesday, September 20, 2023 3:49:00 PM
Hello Hamilton,
It was good to meet and discuss the ordinance today. I believe I answered your questions during the meeting, except the last question, which I now answer after a quick chat with CBO George Hoyt. The answers are below. Hopefully our meeting helped your understanding of the proposed ordinance and alerted me to some questions we may get from members of the public.

Questions for Amy French
Today how close can ADUs place air conditioners and heat pumps to the property line?
On-Line adopted ADU code PAMC 18.09.040:

Item (i) “Noise-producing equipment such as air conditioners, water heaters, and similar service equipment that exclusively serves an ADU/JADU may be located anywhere on the site, provided they maintain the underlying front yard setback requirements of the property and, if the property is a corner lot, a 10-foot street-side setback. All such equipment shall be insulated and housed, except that the Director may permit installation without housing and insulation, provided that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure compliance with the city's Noise Ordinance at the nearest property line. All service equipment must meet the city's Noise Ordinance in Chapter 9.10
of the Municipal Code.”

The new ordinance:
the ordinance going to Council on 10-2 provides a ‘presumed compliance’ option that enables a 3 foot setback, as per the table. ADU applicants can follow the new table, but ADU applicants can also propose to place equipment WITHIN the 3' setback area – but if it is placed there, it MUST comply with the existing code 18.09, which requires compliance with the noise ordinance, Section 9.10.030 (a) (i.e. sound of equipment is less than or equal to 6 db above ambient).

Your situation – rear setback request
In our meeting, I clarified the new ordinance says “shall provide a minimum three foot interior side and rear yard setback, and a minimum ten foot street side yard setback.” This solves your home’s particular issue since your interest is placement in your rear yard (and your garage is 10 feet from rear property line).

How much difference would it make measuring the sound on the other side of a 5 foot fence from the heat pump HVAC?

I have no idea. We did not ask our consultants to study this.

Could you require sound be measured on other side of fence? If there is a fence along the property line…that is an option but would require resources we do not have; it is possible the Council could move a modification to the ordinance.

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Why not 53 dba at property line in 60 dba ambient noise zones per the comp plan? If the local ambient level is 60dBA, then the requirement is to not exceed 6 decibels above 60 dBA at the property line, if you propose to place the equipment at 3 feet or more from the interior property lines. If the equipment is 67 dBA, and you want to place it 3 feet from the property line, then an applicant can request a Home Improvement Exception for that 1 decibel over 66 dBA.

Any concern about the heat from a heat pump 3 feet from the property line blowing heat onto the neighbors property and damaging their vegetation? We did not consider this. Thank you for alerting us that former CM Dubois brought this concern to you.

Director can approve up to 6 dba more but is going to require a sound study? It may require a noise study to verify the local ambient level is over 50 dBA. The Comprehensive Plan existing noise contours map (below) that shows 60, 65, and 70 dBA CNEL is not showing “ambient noise levels”. A noise study could determine ambient dBA level as defined in our municipal code:
(d) "Local ambient" means the lowest sound level repeating itself during a six-minute period as measured with a precision sound level meter, using slow response and "A" weighting. The minimum sound level shall be determined with the noise source at issue silent, and in the same location as the measurement of the noise level of the source or sources at issue. However, for purposes of this chapter, in no case shall the local ambient be considered or determined to be less than: (1) Thirty dBA for interior noise in Section 9.10.030(b); (2) Forty dBA in all other sections. If a significant portion of the local ambient is produced by one or more individual identifiable sources which would otherwise be operating continuously during the six-minute measurement period and contributing significantly to the ambient sound level, determination of the local ambient shall be accomplished with these separate identifiable noise sources silent.

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Can you install heat pump compressor under a fixed window that does not have an opening mechanism? Note, I was recently told use by building inspection (but sometimes different folks give different answers).

You noted you received a response from building that it could NOT be placed under a window that HAS opening mechanism. I contact CBO George Hoyt who says ”It can be installed under a window as long the window is not a required emergency egress component.”

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City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORT
Lead Department: Administrative Services
Meeting Date: October 2, 2023
Report #:2307-1771
TITLE
Sales Tax Digest Summary Calendar 2023 Q1 (January 2023 – March 2023)

DISCUSSION
This report transmits information regarding the City of Palo Alto’s sales tax receipts for the first quarter (January - March) of 2023. Further and more detailed levels of information can be found in the attached City of Palo Alto Sales Tax Digest Summary 2023 Q1 (Attachment A).

The City’s sales tax cash receipts of $8.07 million for the first quarter (January to March 2023) is $36,400 (0.4%) lower than the same quarter of the prior year (see Attachment A, Historical Analysis by Calendar Quarter). When adjusted for non-period related payments, the overall economic quarter over quarter sales tax activity (Q1 2022 to Q1 2023) in Palo Alto increased by $0.1 million (1.5%).

For the year ending in the first quarter of 2023, sales tax cash receipts for the city increased by